Oil price discussion and analysis

[Smurf1976]

Re: OIL AGAIN!

And right now the UK has a natural gas prices with prices now about double the price of oil on an energy content basis.

The UK made the most tragic of mistakes possible in power generation, heavy reliance on gas. Now they are paying the price and will pay, pay and pay again for years to come.

No doubt there are some good investment opportunities in gas and also non-gas power generation over there though. Just steer clear of anything which uses a lot of gas or electricity in the UK because it's getting rather expensive with wholesale spot gas price increases up to 50% in a day recently.

Closer to home, New Zealand is faced with a significant (but by no means certain) generation shortfall in 2006. This is a system energy constraint rather than a peak load constraint. It is likely that a government-owned oil-fired plant, the only thermal plant not already running flat out, will be online in a matter of weeks and after that there is no more. NZ is also faced with a long term gas supply shortfall as the Maui field depletes so good opportunities for anyone who finds gas over there.

And don't forget the USA, another country with a gas shortage.

Oh, and I almost forgot. There's an issue with oil too...

 

[wayneL]

Re: OIL AGAIN!

I reckon a good spot to live is where it's both windy and sunny....like Geraldton

(.....plans for solar panels and windmill on roof.)

 

[RichKid]

Re: OIL AGAIN!

Chart of oil, prices have really tightened and bounced off the important 56 support level, downtrend not broken yet but I think we may see a higher swing low, we'll know next week....maybe a small double bottom as part of this swing.

 

[RichKid]

Re: OIL AGAIN!

Looks like this correction is over, nice higher swing but the price is a bit muddled atm. The Fat Prophets have a graph here showing the overall bull run, they expect it to go to $85+, don't you love the geometry in these commodity charts!!? Beuuudiful.

http://www.fatprophets.com.au/content.aspx?page=Chart+of+the+Month+-+7+Dec+05

 

[RichKid]

Re: OIL AGAIN!

Just eyeballed the chart again, there's a moderate support/resistance line at about 62- shows up better on candle charts. If it can't get through it and re-establish it as support I expect it to range below till it gathers enough steam to press higher again. When all's quiet on the oil front is when it's time to get ready for the next bit of panic or euphoria imo- not that it's always an accurate guide.

 

[mime]

Re: OIL AGAIN!

And right now the UK has a natural gas prices with prices now about double the price of oil on an energy content basis.

The UK made the most tragic of mistakes possible in power generation, heavy reliance on gas. Now they are paying the price and will pay, pay and pay again for years to come.

No doubt there are some good investment opportunities in gas and also non-gas power generation over there though. Just steer clear of anything which uses a lot of gas or electricity in the UK because it's getting rather expensive with wholesale spot gas price increases up to 50% in a day recently.

Closer to home, New Zealand is faced with a significant (but by no means certain) generation shortfall in 2006. This is a system energy constraint rather than a peak load constraint. It is likely that a government-owned oil-fired plant, the only thermal plant not already running flat out, will be online in a matter of weeks and after that there is no more. NZ is also faced with a long term gas supply shortfall as the Maui field depletes so good opportunities for anyone who finds gas over there.

And don't forget the USA, another country with a gas shortage.

Oh, and I almost forgot. There's an issue with oil too...

Hmmm I remember Kim Beazly had the idea of gas turning Australia more gas dependent. I didn't think it was such a bad idea but now I'm not so sure.

 

[wayneL]

Re: OIL AGAIN!

I don't know whether anyone's noticed, but we >$63 again.

 

[RichKid]

Re: OIL AGAIN!

I don't know whether anyone's noticed, but we >$63 again.

Sure did! Watching those swings very closely. Now for the retest of 62 and we're back firmly above a support level.

Here's a quick chart, has dipped a bit but still looking good, I'm looking for the higher swing low and for open interest to rise but I'm not sure how significant the latter is.

 

[TheAnalyst]

Re: OIL AGAIN!

I don't know whether anyone's noticed, but we >$63 again.

tell me about it i sold my santos installments the other day at a reasonable profit having purchased them before xmas...if i waited a little longer i would have made 3 times as much...oh well must be happy becuase i have a few months supply of petrol for free now.

 

[michael_selway]

Re: OIL AGAIN!

Sure did! Watching those swings very closely. Now for the retest of 62 and we're back firmly above a support level.

Here's a quick chart, has dipped a bit but still looking good, I'm looking for the higher swing low and for open interest to rise but I'm not sure how significant the latter is.

Hi looks good,

just wondering whether u can post a 2-3 year chart for crude

Thanks

MS

 

[RichKid]

Re: OIL AGAIN!

Hi looks good,

just wondering whether u can post a 2-3 year chart for crude

Thanks

MS

Hi MS,
You can try www.futuresource.com (that's where I get mine from- it's all free), they aren't flexible enough to allow you to get specific time frames but if you fiddle with the chart size and style you should be able to get what you need.

Or you can try www.morrisonsecurities.com.au but their charts aren't as clear for me.

 

[wayneL]

Re: OIL AGAIN!

Hi looks good,

just wondering whether u can post a 2-3 year chart for crude

Thanks

MS

Here is 2 years of the feb '06 futures contract

 

[doctorj]

Re: OIL AGAIN!

Monthly chart for rolling crude futures all the way back to midway through '94 and 3 yr weekly chart for same contract.

Any more, please feel free to request.

 

[michael_selway]

Re: OIL AGAIN!

Monthly chart for rolling crude futures all the way back to midway through '94 and 3 yr weekly chart for same contract.

Any more, please feel free to request.

Wow thanks doctorj/waynel

It appears than Crude has really taken off only in the last 2-3 yrs

Would you guys also be able to post chart for Crude since the 1980s till now? esp showing the all time high of $80/barrel?

Thanks again

MS

 

[Smurf1976]

Re: OIL AGAIN!

Would you guys also be able to post chart for Crude since the 1980s till now? esp showing the all time high of $80/barrel?

US Dollars I assume? Crude oil hasn't ever traded at US$80 per barrel. The all time high is around US$70 (approx) a few months ago prior to the announcement of the temporary stock drawdowns by the IEA of both crude oil and refined products.

 

[michael_selway]

Re: OIL AGAIN!

US Dollars I assume? Crude oil hasn't ever traded at US$80 per barrel. The all time high is around US$70 (approx) a few months ago prior to the announcement of the temporary stock drawdowns by the IEA of both crude oil and refined products.

Oh, i thought i read somewhere that in the mid 1980's it reached (maybe equivalent) of $US80/Barrel? The recent $US70+/barrel didnt break the record i heard also. Can someone please confirm with a crude chart from the 1980 till now?

Thanks

MS

---------------------

"Even compared to 1981, when oil prices touched $80 in real terms, the U.S. bill for overseas oil is way up. That year, the EIA says the average oil price was $31.77, or $66.30 in today's prices.

http://www.forbes.com/2004/08/16/cx_da_0816topnews_print.html

 

[Smurf1976]

Re: OIL AGAIN!

Until recently the peak price was around $40 set in the mid-1980's prior to the effective collapse of OPEC control during that period as North Sea output ramped up and global demand fell as nuclear and coal-fired generation increased thus cutting demand for fuel oil.

In inflation adjusted terms this is somewhere around the equivalent of $90 now so I think that's what you're thinking of.

US$70 was a record in nominal terms but not in real terms. That is, the oil was worth a record volume of a depreciating unit of measurement (Dollars).

I'll post a chart if I can find one that's in nominal dollar values. I did have one somewhere which went back to 1859 (the beginning of the modern oil industry) so that ought to cover everything but it's a "real terms" chart and not a nominal price one so it shows everything in 2004's depreciated Dollars rather than actual price at the time which isn't much use here.

 

[Smurf1976]

Re: OIL AGAIN!

"Even compared to 1981, when oil prices touched $80 in real terms, the U.S. bill for overseas oil is way up. That year, the EIA says the average oil price was $31.77, or $66.30 in today's prices.

http://www.forbes.com/2004/08/16/cx_da_0816topnews_print.html

I've highlighted the effective answer to your question. Nominal price versus real terms.

 

[michael_selway]

Re: OIL AGAIN!

I've highlighted the effective answer to your question. Nominal price versus real terms.

oh ok do u (or others) have the normal (nominal one) from 1980 till now?

Thanks

MS

 

[Smurf1976]

Re: OIL AGAIN!

There's a nominal (not real terms) price chart here http://www.eia.doe.gov/emeu/cabs/chron.html

It's complete with chronology of major oil industry events back to 1970. Should be what you're looking for.

The chronology looks reasonable although I haven't read it all. Do bear in mind though that it's written from the perspective of the government (USA) of a major oil importing country and so sees price increases as "bad" whereas an exporting country would see them as "good". Like anything it depends which side of the trade you're on whether an increase is good or bad.

Regarding the EIA, their recording of actual events is fairly good in general but the track record of their forecasts isn't good especially where oil discovery is involved.

Note also that the EIA (Energy Information Administration) is totally separate from the IEA (International Energy Agency) despite the similar abbreviation and both dealing with energy.