Storm Cat

Saudi Oil Pricing Paradigm Shift: WTI Index Out, ASCI Index In

On Nov 11 11:09 AM ETF STER wrote:

"Does anyone bother to look at current consumption of oil by the United States? 25% of total crude consumption daily at 86.14/mlb/d is about 21mlb/d. Our (U.S.) current consumption of oil is between 13-14 mbl/d. That equates to approx.14-16% of world oil consumption. Even in 2008 average consumption of oil was about 14-15 mbl/d."

... and your point is?

Saudi Oil Pricing Paradigm Shift: WTI Index Out, ASCI Index In

I don't buy the premise that the Saudis are moving to the ASCI because of price manipulation. The vast majority of "alleged" price manipulation involves higher prices ... which the Saudis like (until it kills global economic growth).

I feel they are tired of having so much USD exposure in an environment where US economic policy supports/causes the dollar to significantly debase.

Barnes and Noble's Nook May Not Ring Death Knell for Amazon's Kindle

What a poorly supported column. The kindle's following and loyalty are not even in the same universe as that of the ipod. You even admit you're not a "gadget guy" further eroding the credibility.

I travel a lot for work and own a kindle. It is functional but has many shortcomings (eg, no backlight, poor wireless reception, slow, pricey). As soon as a better alternative comes out I will stop using the kindle. I will look closely at the nook but probably wait for Apple's response.

Sorry guys, you are incorrect here. Kindle is functional but severely lacking for the price.

CFTC Belatedly Discovers the Speculative Oil Bubble

On Aug 01 11:24 AM jerrydd wrote:

"Personally I think futures should only be sold to those needing to
hedge oil, corn, etc"

And the buyers would be who exactly? If you bar the speculators you'll have an issue here. You can't match end-users and producers without timing & volume issues

CFTC Belatedly Discovers the Speculative Oil Bubble

".... there was no physical shortage of supply (the saudi oil minister said so) .....

That is perhaps the funniest post I've ever read on this site. "The Saidi minister said so: ... LOL , If you believe that you are a complete moron.

Speculators Stabilize Oil Prices: Here's Proof

"Help do your part to lower energy prices. Take action by visiting by StopOilSpeculationNow.com"

I am sad that you are not a believer in free markets

Speculators Stabilize Oil Prices: Here's Proof

"The CFTC has granted Wall Street banks [like Goldman Sachs] an exemption from speculative position limits when these banks hedge over-the-counter swaps transactions.

Right. The exemption was granted to permit banks to hedge the transactions they enter into with Oil & Gas companies (who are hedging production). Why should a bank's hedge of such a transaction be included as a speculative position when it is plainly "Commericial" in nature.?

I do agree that classifiying a bank entirely as "commericial" yields inaccurate data because they do also take speculative positions. However, the broad brush you are using overestimates the magnitude of the distortion.

"The really shocking thing about the Swaps Loophole is that Speculators of all stripes can use it to access the futures markets. So if a hedge fund wants a $500 million position in Wheat, which is way beyond position limits, they can enter into swap with a Wall Street bank and then the bank buys $500 million worth of Wheat futures. "

Except that the vast majority of HFs don't execute a position of such magnitude on a linear basis (ie, long/short). Moreover, banks don't take unlimited credit risk on HFs. Such a position (long/short) would most likely need to be fully collateralized making it cost prohibitive. Moreover, the counterparty would need an ISDA agreement and credit/risk limit approval

" Another example of the effects of speculators in the crude oil commodities market was the “ Rogue Trader” who with a 16 million barrel order of crude, pushed up the price of crude oil $4 in the blink of an eye."

I trade oil for a very large bank. No salesman would execute an 18MMbbl order without insuring it is authorized. Moreover, an order like that isn't executed "in the blink of an eye". It is executed quietly and slowly over the course of one or more trading sessions. Finally, a "rogue" trader can and does happen in ALL markets.

Remember $20 Oil? Looks Like It's Coming Back

"the 20 $ price if it occurs would create great unhappiness among
the people who filled their tankers to the brim & now have them
parked in the gulf of mexico or wherever."

Absolutely false, those tankers were filled with nearby priced oil and hedged with long-dated futures. The profit is locked in. It's called CONTANGO !!

Is Natural Gas About to Break Higher?

" Our experience suggests that commodity equities lead the behaviour of commodities"

Come on. Can this website get an experienced commodity trader to write about Oil & Gas for once. This premise borders on the ridiculous. Equity traders that watched oil collapse to $35 from $145 simply started accumulating oil & oil related stocks figuring the bottom must be near. Most traders buy/sell based on expectations. The risk/reward of getting long oil related equities when oil is trading $35 doesn't require a PhD from MIT.

T. Boone Pickens' Epic Wind Fail

On Jul 10 10:49 AM Fighting Yoda wrote:

> T Boone is a pioneer - has game chaning ideas - NG fueled cars ,
> Wind turbines etc - all are very viable ideas - he is simply ahead
> of times. NG fueled vehicles should have taken off a long time ago
> but the conversion/acceptance has been very low despite all the effort and investment on his part.

I disagree. His ideas are not "game changing". They've been around. However, I do give him credit for attempting to bring them to the forefront ... granted, he wasn't doing out of the goodness of his heart .. but that's what drives innovation .... PROFITS .. maybe someone should teach that to the current Admin

Natural Gas: Worth Another Look

> When mentioning Iran... it was a small possibility that would cause
> the dollar to fall, thus increase the prices of commodities.

Again flawed logic. A falling dollar boosts oil prices because it increases the purchasing power of those whose base currency is something other than the greenback (think China, India, etc). For example, as the dollar falls, 1 Chinese yuan buys more oil than before. Demand rises.

NG is a domestic market predominantly traded by those of us whose home currency is the USD. Very little FX impact

Natural Gas: Worth Another Look

Jun 30 12:45 PM Herman Hemati wrote:

> I am just pointing out the fact that there is a link between political
> tensions and energy prices....
>
> More than likely, a rise in prices at one location will cause prices
> to rise at others; i.e. Henry Hub.


Amazing! This is but one of several articles I have read by authors on this site that lead me to believe they know little, if anything, about the energy markets. You can try to cover your tracks by claiming you are pointing out the link between political tensions and energy prices but it is a poor defense. EVERYONE understands that already. It's like stating "the ocean is deep". Yeah, no kidding.

Moreover, political unrest in Iran has ZERO impact on US Nat Gas prices. My bet is you have very little experience in the natural gas market. I'm just annoyed that I'll never recover the 30 seconds I wasted reading this article!

Larry Kudlow struggles to characterize the new blend of capitalism that has the government asserting regulatory control over key sectors of the economy. State capitalism? Crony capitalism? One thing's for sure: it ain't a free market.

... and you Sir fail to understand the importance of objectively reading and debating the writings of those who do not walk in lockstep with your beliefs. Your post would be far more powerful if you critiqued Kudlow's article based on the merits of his argument rather than posting a knee-jerk comment that paints you as a left wing elitist (which you may or may not be) and prompts many of us to dismiss you outright.



On Apr 22 12:12 PM Anwar Bhamla wrote:

> Larry Kudlow is nothing more than a right wing shill. Why are his
> thoughts on an economics/business site?

Is It Possible the Current Recession Was Caused by Oil Prices, Not Housing?

I think high oil prices definitely played a role. However, if paying $4.00 at the pump rather than $2.00 caused you to default on your mortgage, you have way too much leverage. Individuals in this day and age have fallen into a culture of instant gratification. "Living within your means" seems to be a lost imperative.

I still believe the driving force behind the current malaise was housing. More specifically, the the packaging and mass distrubution of loans backed by non-creditworthy individuals magnified by huge leverage, poor risk management and less than sufficient regulation/oversight. Of course, punative energy prices exaserbated the problem

John Hussman: Wishful Thinking

" ... while the poor grew wages which were destroyed by inflation"

Kindly show some hard data to support this sweeping, unsubstantiated, off the cuff remark.

"In both cases, low capital costs and free trade made it easy to move machines and destroy equity capital .... The fact that today most of American manufacturing companies are debt bombs is hardly a coincidence"

How can you make a statement like this without referencing the outrageous salary and benefit costs imposed on American manufacturing by Unions?


"For myself, I see no real reason why unemployment can't go to 20%. The only real justification is that drops in the past were followed by expansions."

I'm not even sure what this means

Our reserve currency status is over.

You are incorrect. Our reserve currency status will remain in place until we are no longer the world's dominant military power. Do some research and you will find this is typically the case.

"GE may have leveraged up too high but they also pissed away their equity by buying shares and paying dividends. There's little reason to believe it'll be different this time."

These two sentences don't even belong together. The GE statement is a nonsequitur.

Why did I bother to pick apart your comment? Because I'll never get back the 30 seconds I wasted reading your incomprehensible post.