Ramrod

Does 'Speculation vs. Fear' Matter When Oil is Running Out?

I serious doubt this author has any concept of energy supply/demand ECONOMICS...

Is Oil a Bubble? Part One

I amazed to see the number, and certitude, of pontifications from the peak-oil-evangelists here. Unfortunately, the fact is there is simply a massive amount of crude out there that is profitable to produce at $100/bbl. Collectively speaking, you have no idea of what you are talking about if you insist that supply is "inelastic".

Without ANY DOUBT, this bubble will pop. How high it goes before it does I have no idea. But based on the sheer number of ignorant rants proclaiming there is "No Direction But Up Forever" it is clear this bubble will be a whopper. Unfortunately, if it pops later rather than sooner it may even be The Whopper.

The issue isn't that oil has spiked and is BY GOSH GOING HIGHER. The issue is that by setting energy policy based on irrational fears of theoretical ecophobic circumstance we have caused energy to spike BY SENTIMENT ALONE and have thereby created an environment of extreme uncertainty regarding future CAPEX not only in the oil patch, but the entire energy sector. The result is now Shortage-By-Fiat with prices dictated ever-higher in the commodities pits with the net result that major sectors of the economy are now in extreme jeopardy of collapse.

In other words, congratulations to all you left-wing energy scholars and self-appointed enviro-geniouses out there! You have literally worried us to death. Well done!

Yada, yada, yada. I can already hear the replies. The sky is falling, yada. Too many people, yada. Too much wealth, yada. Too many cars, yada. The world is ending in 18 months, yada.

Personally, I am going short against you and I will take your money when this does what it always does because I assure you that it is NOT different this time.

Why I'm Betting on a Surging Gold Price

Your analysis ignores the implications for gold price movement to the short side based on a preponderance of bullish sentiment.

Why dat?? Because the gold perma-bull you are quoting said something as profound as "I consider option players highly sophisticated speculators."

What about the sophistication required to write all those call options in the face of such overwhelming bullish certainty??

A Consumer Price Index for the Asset-Rich and Asset-Poor

>

Oh I pray not.

I am hopeful their income is "indexed" by the opportunities flowing to motivated and self-interested parties acting in a free market economy.

If you really want to make things difficult for the "young renter", force her to work for crumbs in the shadow of a centrally planned economy wherein wages are indexed (read: fixed) by mandate from a government economist who's idea of <i>incentive<... is free coffee in the break room.

Despite the Recent Market Run-Up, I'm As Bearish As Ever

You sell-siders sound like a bunch of guys standing deep below decks and smoking cigarettes as the ship you are on begins to sink... Watching the rats run en masse past your feet heading to higher decks, you confidently tell one another the "lemmings" are obviously "insane" and will be back...

Oh, and it is ENERGIZER bunny. Which goes a long way in explaining your confusion.

As Oil Prices Slide the Pundits are Playing it Slick

Your articles have revealed you to be a politicized bomb thrower with opinions that are best greatly discounted.

Frankly, Mr. Roach is a highly respected economist who this morning coughed up and expectorated more understanding of the commodities markets than you will develop in a lifetime, Phil.

Amaranth Debacle Scorches Wall Street

Amaranth been drinkin that scarce-oil, er- gas, kool-aide.

RIP sucka.

Today's BP Spill: Timed To Keep Oil Prices Up?

Maybe now they'll cancel their insultingly stupid ad campaign?

Unfortunately for BP, there is no excuse for this screw up and no place to hide. None. The simple get-out-of-bed-and-do-... fact of the matter is that <i>any and all corrosion in this pipeline should have been logged for <b>years</b&g... as part of normal, industry standard, pipeline maintenance practices</i>.

The truth is a screw up of this magnitude can <i>only be attributed to total negligence</i>. Some law firm is about to have a field day.

Just hide and watch...

But it sure helped T. Boone, didn't it?!!

A Cautious Bull on the Oil Market

This report says all there needs to be said on the outrageously distorted oil market:

biz.yahoo.com/fool/060...

When this one pops it's gonna be ugly...

Oil Continues To Be Range-Bound

Maybe the smart money is growing skeptical of the Extortioner of Tehran's continued sabre rattling in the face of a dawning awareness of a crude oil glut?

www.breitbart.com/news...

I really like the quote <i>"World oil prices rose above 74 dollars per barrel on Thursday, <b>supported by strong demand for motor fuel in the United States,</b>, supply disruptions in Nigeria and also by continuing violence in the Middle East."</i>

Strong demand in the US?? Well let's take a look at motor gasoline deliveries in the US for the past 23 YEARS...

Year Avg/MGal/Day
1983 - 51,106.90
1984 - 57,573.40
1985 - 57,536.10
1986 - 61,369.30
1987 - 61,023.50
1988 - 61,029.20
1989 - 61,226.00
1990 - 60,347.90
1991 - 61,180.50
1992 - 59,127.60
1993 - 57,218.80
1994 - 55,033.20
1995 - 55,922.50
1996 - 57,536.00
1997 - 61,123.40
1998 - 63,330.30
1999 - 61,956.00
2000 - 60,896.90
2001 - 62,013.40
2002 - 63,638.40
2003 - 63,830.50
2004 - 58,388.60
2005 - 60,282.98
2006 - 57,951.28 (year to date)

Source: <i>tonto.eia.doe.gov/dnav...;/i>

Looks more like stable demand to me - like it has been for the past 20 years. Clearly using US Motor Fuel demand as a primary excuse for $75 crude is unwise...

How long will the "Soaring, Booming" fairy tales continue unquestioned??

Is the U.S. Going Bankrupt?

Wow John, I'm glad you can count so well!

For a minute I was nervous. After all, if a Liberal looks me in the eye and tells me I'm broke, well, I must be really in need of his help. I guess you could call that Neo-Realization-Of-A-N...

Go ahead, raise my taxes! I won't mind! Not a bit!

Oil at $85 or $65 a Barrel? Either Way ExxonMobil Bores to New Highs (XOM)

Really good point. Funny that XOM almost becomes a hedge against oil falling back to $55...

Why Oil is Cheap at $75 a Barrel (ETF: USO)

When I decide buy into $200 oil, I'll let you know so you can go short with a clear contrarian conscience!

Honestly, I was long gold and energy at the start of the year. But as soon as I saw a seriously worded report that gold was heading to $3,000/oz I sold my position. Likewise, when the consensus view on oil got outrageous long I cut that position way back, as well.

Since then all I see is a lot of risk, and a lot of uncertainty, but not much opportunity. But the situation is now very fluid and I could be strong and long both by Tuesday.

But make no mistake: for everyone but Chicken Little, sustained prices at $100/bbl is outrageously long. Won't happen. If it does it's Katy-Bar-The-Door, and too many vested interests lie between here and there for it to ever happen.

Rob Black's Energy Stock Report

"Saudi Arabia is experimenting with new techniques..."

At these prices you ain't seen nothing yet.

Why Oil is Cheap at $75 a Barrel (ETF: USO)

Your logic is fuzzy, and your arguments an attempt to buttress The Perception of Scarce Oil. The perception, not the reality, of scarce oil is, in my view, the real risk in the financial markets. The stated certainty of scarce oil is misinformation of the first order and eerily reminiscent of the Dotcom era's "This Time It's Different." Worse, it empowers every two-bit dictator with an oil field with the once in an epoch "knowledge" that he's got the world by the cojones.

#1 &amp; #2 - "Seems scarce and bleak..." Seems? At $75 a barrel there is enough marginal crude to drown this market. Every hole that ever produced a drop of crude is profitable, even after overpaying a service company to come out and re-work it. On top of that you can afford to explore and drill on Saturn if the field potential is big enough.

#3 - Governments of so-called oil producing nations have zero credibility, in general, and are only interested in continuing the Perception of Scarce Oil that now propels prices to levels unsupported by actual of supply and demand. If they can wrap themselves in the Sincerely Green Flag of Environmentally Concerned Earthlings AND profit from the continued distortion of crude prices, well so much the easier to keep the market on its heels.

#4 - What does refinery utilization have to do with crude oil supply, in it's purest sense? If there is a refinery outage of large enough extent to actually matter, macro-economically speaking, then that has a POSITIVE impact on crude availability - not negative. All that crude has to go somewhere, and tanker owners are not generally happy to become floating storage tanks while some refiner fixes a busted cat cracker. And if you have to ask what that is, then we shouldn't be having this conversation.

#5 - One big reason drilling is expensive is due to an inherent shortage of rigs. We are short rigs because of the last couple of times crude spiked, crashed, and bankrupted the domestic industry. Another reason is the places they like to look are remote and often harsh. But make no mistake: at $55 oil is a profitable product to produce. At $75, well, soon enough you'll see it flowing in the gutters. I shudder to think of the vast pool of crude oil $100 a barrel will produce - and the accompanying crash.

#6 - Relying on "Global Warming" to create supply disruptions is, in fact, like relying on the Tooth Fairy to bring you a Krugerand. Neither Global Warming nor the Tooth Fairy have been conclusively proven to exist, and your bald-faced reliance on Global Warming's <i>certain</i... existence renders your entire argument suspect in the extreme.

Let me tell you: This time it is not different. The market will determine, through supply and demand, the reality or non-reality of scarcity for this commodity. Fuzzy logic that "seems" so real is no defense against the workings of this industry in the specific or the market.