Dr. No

Funds Flow, Priming Markets for Another Fall

Nice point about the GDP difference. Taking it the obvious step further, to increase global GDP by the same amount, the Chinese economy needs to expand five times more than the US economy, the indian economy more than 12 times. That does put the hopes and expectations put on Emerging Markets in perspective.

$90 a Barrel Oil Is the Floor for Cellulosic Ethanol, Says Study

Oh, and I forgot, the Sandia study actually makes the point that the US CAN produce its 90bn domestically.

$90 a Barrel Oil Is the Floor for Cellulosic Ethanol, Says Study

I think the study's premise was to replace 90bn gallons and not 75bn. I also think the technology currently available allows competitive CE at $75/bbl. Maybe the numbers just got mixed up.

Not All Commodity ETFs Are Created Equal

"Either oil is overpriced or natural gas is undervalued." This assumes a somewhat fixed offering and demand of oil to gas. Could be that all of a sudden more gas (or expectation thereof) is available (and gas got cheaper by more supply and same demand) and you now move from a 8.6 to 18.1 ratio.

Wind's Our Future, but Natural Gas Is Now

Wind is at grid parity or below. Natural Gas in not commonly available at gas stations and the cars are not fitted for it, like electric for cars.
Electricity however has several input choices some renewable, NG is limited. Wind is now, NG in the future and only temporary for 100 years. Of course Picken's doesn't care what happens in 30 years or thereafter. He is dead then. As goes the President.

Oil, Gas, Electric Cars, the Market and the Economy

Muddling Invester: I love your calcualtion and reality check. So how does the electro-magnetic field look like around a thigh-thick conductor at 200V and 4000Amps?

tyklakewalker: Last time I checked sugar cane gorws only in Florida, Louisiana and Hawaii domestically. We should replace middle east oil dependence with brazil ethanol dependence ??? Further: You make lemonade with lemons: The midwest agriculture grows what it can given the long and harsh winters and the hot and humid summers. It ain't Hawaii and it ain't California there. You need to look at land effeciency and corn is pretty darn good for that.

Oil Approaching Bear Market Territory

No figure how much value you create at all oil-depending industries by droping oil prices (into just 60% more than last years price).

On Oil and Its Manipulation

ronmac/dan: you small potatoes trader settle at the end of the month. if you would be a big potatoes trader you would roll over your deal at the end of the month because there is a bigger idot to buy. which is the reason why there is ten times the volume traded than delivered.

dan: all that is being asked is that you trade/speculate the same way AS IN equities, ie put up 50% margin and not 5-7%. Or even better gamble as in the casino, where the bank ALWAYS wins and you have to put up 100% of your chip value and not just 5-7%.

We Can Lower Gas Prices Now If We Drill, Drill, Drill

If there is any truth to the hypothesis of "more drilling = lower oil/gas price", then yesterday's announcement by the Iraqi's to increase oil production from 2.5 million barrel to 4 million barrel by accessing four new oil fields (as in NOW) should have sunk the oil price like a stone.
Lemme go check at the gas station right a way....

Even the Gas Crisis Needs a Culprit

Just to more points:
* Systems can be put into resonance mode which leads to catastrophic failure. So the Sanford Bernstein comment sounds intelligent but actuallty is wrong. You can have catalysts leading to catastrophic failure, think resonane, think nukes.
* The CFTC also admitted that they do neither have enough people nor the data to actually comment on the situation. In fact the very definition of the Enron loophole puts the CFTC out of monitoring ICE and DME, the prior being controlled by GS and MS, talking about fox in the henhouse...

Even the Gas Crisis Needs a Culprit

As opposed to Tim and redbaron, Masters actually delivered numbers ad nauseam. Only numbers are the facts. While Tim reiterated all qualitative arguments which are not facts then, the point Masters and Greenberg make is that if you care to look at the actual proportions and numbers they do not add up to justify the jump in the ENTIRE commodity sector, including oil. Further, even seasoned economists are not anymore defending the effecient market hypothesis. Finally, what we are seeing is a time delay in the system, much like other systems we may need to differentiate between the stochiometrics and the kinetics of the reaction. The kinetics do take time. The CDO and dot.com bust also did not happen over night, it was a six months long implosion.

Speculation and the Price of Oil

Banks was careful to cite himself several times in his lengthy and wordy piece of self-appreciation, pointing to other sources he likes. But why skirting around the testimonies of Masters and Greenberg, which in detail lay out the isssues in the factually uncontrolled commodity markets refuted all his theory? ICE/IPE and DME use the same legal loophole created in 2000 to allow Enron energy trading without FTC/CFTC/SEC supervision. A market without supervision is certainly trustworthy?

World assets under management increased by 50% since 2000, this money has to go some place and creates demand for new asset classes as old ones (stocks, bonds) are perceived as tainted. With GS & MS setting up commodity exchanges they kindly marketed those to their clients and demand for investable assets first created the CDO bubble and then the commodity and energy bubble.

If please someone would look at actual numbers of physical and financial/index speculators and their demand and supply, you would realize what is going on. You can overlay the dot.com, housing and CDO and commodity bubbles and will see the not so strange similarities.

That said, long-term, i.e. over the next 10-15 years we may see real issues covering the global demand. But if the increase in oil demand from China is roughly that of financial speculators trading on ICE/IPE/NYMEX etc., and as long as Morgan Stanley holds two entire annual wheat harvest, we are likely seeing other phenomena at play.

Oil Prices and the "Bigger Fool" Theory

It is all about supply and demand - supply and demand of paper on oil and other commodities, demand for ever higher returns on assets invested.
The Gramm loophole and his wife being at the CFTC is quite amazing. Too bad that Spitzer got hooked. We should have Enron 2.0. Where are Sabanes and Oxley these days ??

How Oil and Gas Prices Fare in Dollar vs. Euro Terms

The problem with technical analysis is that you can show whatever you want depending on how you cut it and mostly it is obvious.

Is Oil a Bubble? Part 3

The oil price bubble is a problem of financial paper demand and supply, just look a the relative proportions of physical to financial/index trading.
That said, don't ignore the greenhouse gas issue along the issue of increasing demand in Chindia. The first requires us (and anybody else) to wean of oil no matter how the bubble now turns out, the second will reignite long-term price increase and we have to become more effecient and think about where we actually really need petrochemicals. Arguably not in transportation (spare air travel), however in the petro-CHEMICAL industry. Arguably also not in fertilizer production. For those there are holistically better solutions. The benefit of the oil price bubble is that it drives energy effecient behavior, maybe for the wrong reason, but the outcome is positive overall. Just going ahead with oil exploration will increase CO2 output and that is the last we need.
I would have hopped for some more careful data reporting and analysis here.

Re: Cooling: Are you absolutely sure it is less effecient to cool houses in summer in the South vs. heat houses in the winter in the North? Do the math! Living in the North only works since mankind invented the fire and created greenhouse gases to go with it. Before, manking lived in the warmer regions. Somehow civilization started there and not at the poles.