Ramrod's Comments

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

Fri, 23 May 2008 10:45:55 -0400

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

Is Oil a Bubble? Part One

Fri, 23 May 2008 10:36:39 -0400

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

Thu, 06 Sep 2007 10:24:59 -0400

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

Tue, 24 Jul 2007 00:38:05 -0400

>

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 incentive<... is free coffee in the break room.

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

Sat, 28 Oct 2006 12:16:14 -0400
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

Tue, 19 Sep 2006 10:20:26 -0400
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

Tue, 19 Sep 2006 09:28:51 -0400
Amaranth been drinkin that scarce-oil, er- gas, kool-aide.

RIP sucka.

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

Mon, 07 Aug 2006 19:09:57 -0400
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 any and all corrosion in this pipeline should have been logged for years.

The truth is a screw up of this magnitude can only be attributed to total negligence. 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

Tue, 01 Aug 2006 16:33:31 -0400
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

Thu, 27 Jul 2006 10:09:51 -0400
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 "World oil prices rose above 74 dollars per barrel on Thursday, supported by strong demand for motor fuel in the United States,, supply disruptions in Nigeria and also by continuing violence in the Middle East."

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: 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?

Fri, 21 Jul 2006 09:29:15 -0400
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)

Mon, 17 Jul 2006 16:29:11 -0400
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)

Sat, 15 Jul 2006 12:58:52 -0400
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

Fri, 14 Jul 2006 17:23:56 -0400
"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)

Fri, 14 Jul 2006 17:19:15 -0400
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 & #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 certain
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.

Point/Counterpoint: David Andrew Taylor Misreads Current Oil Inventories

Mon, 10 Jul 2006 15:58:45 -0400
Hmmmm, let's see...

21 BILLION BARRELS PER DAY =
75,000 BARRELS PER DAY PER PERSON IN THE US.

Yep, sounds about right to me! Except for the billions part...

Seriously, it looks like you're off by an order of magnitude.

Taking Advantage of the Dow-to-Gold Ratio (DIA, GLD)

Mon, 10 Jul 2006 10:32:12 -0400
Mike, I share your analysis on GLD and DIA and volatility.

I found a comparison chart with Dow Transports, the Dow Industrials, the S&P 500, GLD, and IYE also to be very informative...

I also keep asking myself why, if gold is such a great store of value, did gold not perform better when the Japanese economy deflated. The only answer I've been able to come up with is if you don't have any slaves to carry the crap around for you, gold makes a lousy currency.

Point/Counterpoint: David Andrew Taylor Misreads Current Oil Inventories

Mon, 10 Jul 2006 09:02:25 -0400
According to your source, the US consumed roughly 3.5 million barrels per day of refined product, not crude, in June 2006 (see tonto.eia.doe.gov/dnav...). Based on that it looks like the shortage (for 10 days consumption) is more like 35 MILLION barrels of refined product, not crude (which will be less).

So I am baffled by how your analysis extrapolates that to an 80 BILLION barrel refined products shortage.

Considering there is close to a billion barrels of crude on the water, last I heard, 35 million barrels of refined products doesn't really support prices at these levels. But, then again, my counting skills are often questioned by my dogs...