Oil price discussion and analysis

[lioness]

Re: OIL AGAIN!

Sorry Red , I disagree . I believe oil stocks have been treated just the same as gold stocks , held back . I'm rather critical at the behaviour on the markets major particpants ( instos etc. ) , they try very hard to create false realities . It's the models they have I'm sure , well that would be the legal excuse .

If anything some funds etc. would be taking up the drops in oilers etc. , those that have allocation room . Lot of overweight financials still out there , but those models have been run for decades . Margin calls or just weak markets always see everything suffer though .

These stocks are talked down and bought , then talked up and sold , it's quasi legal ramping enmasse and Keystone cops police it , because it is a manipulation of a market .

If it didn't happen these sector stocks would be through the roof and the main market participants would have been caught under weight .

A very interesting comment ithateekret(wierd name) and I am sure you are close to the mark.

Small juniors that are close to production such as OEX and INP have lost 50% of their value but are getting close to production.

INP in particular I have watched closely for 3 months and not only is it being capped, but it is being slammed down for accumulation.

Give it another 3-6 months and these will have doubled.

 

[numbercruncher]

Re: OIL AGAIN!

I mentioned earlier that the price of food and oil are now inseperable and will surely result in starvation, seems to be ringing a little more true after reading this ...

Soaring prices force US to cut aid

March 02, 2008
THE US will drastically reduce emergency food aid to some of the poorest countries this year due to soaring food prices, The Washington Post reports today.

Citing unnamed officials, the newspaper said the US Agency for International Development (USAID) was drafting plans to cut down the number of recipient nations and the amount of food provided to them.

A 41 per cent surge in prices of wheat, corn, rice and other cereals over the past six months has generated a $US120 million ($126.5 million) budget shortfall that will force the USAID to reduce emergency operations, the report said.

That deficit is projected to rise to $US200 million ($211 million) by the end of the year.

http://www.theaustralian.news.com.au/story/0,25197,23306070-643,00.html


Seems opec can charge what ever they want for Oil but it will be continually reflected in food prices.

 

[ShareIt]

Re: OIL AGAIN!

My view is that the 3 attempts at $100 may indicate a short term weakness. I'm no t/a expert, but a triple top is bearish, is that correct, anyone? Or is it purely a by product of $US weakness and speculators?

I wouldn't call a triple top bearish... it could mean a consolidation at the top before it makes its next run up.... If the price broke down, then that would confirm a bearish triple top... at this stage, I would say that the price is consolidating at the top (i.e. taking a breather to remove itself from an over bought situation) and then get ready for another push up...

 

[bvbfan]

Re: OIL AGAIN!

also does anyone know how to get oil and/or gold price charts on incredible charts (or is there another free charting service that gives you these??)

thanks

Sorry if already posted but you can on stockcharts, just need to to $XXX:$YYY to get a ratio
For Gold:Oil it's here under $GOLD:$WTIC

http://stockcharts.com/h-sc/ui?s=$GOLD:$WTIC&p=D&yr=1&mn=0&dy=0&id=p71630163787

 

[Wysiwyg]

Re: OIL AGAIN!

Short term support for Brent (may) at 99.60 and this has been hit more than ten times in the last cuppla days.Apparently more longs than shorts on as of last Friday but does that mean Jack beep.Don`t know if it will be an easing or a capitulation.Should know soon.Stop Press.

 

[Smurf1976]

Re: OIL AGAIN!

I mentioned earlier that the price of food and oil are now inseperable and will surely result in starvation, seems to be ringing a little more true after reading this ...

The stupidity of turning food into fuel. Do the math and you'lll soon realise it's not just unsustainable but an outright farce. See my previous posts on the subject for more detail.

 

[IFocus]

Re: OIL AGAIN!

No-one has been able to answer my question on here from 3 months ago.

If oil is heading to 120 plus which looks likely, why aren't the oil stocks whether producer/explorer moving much higher??

Instead, they are moving lower, some much lower.

No-one has bought into the trend yet, but why?

Wondering the same as I look through the charts is currency the issue?

 

[Kauri]

Re: OIL AGAIN!

Rumours persist...been doing the rounds for a week or so now... oil included??? may explain the POO and producers prices??

Fears of a commodity crash grow



Last Updated: 1:31am GMT 05/03/2008




Fears of a commodity crash are growing as speculation continues to outstrip demand. Ambrose Evans-Pritchard reports....

Links.... St Andrews
and ... http://www.telegraph.co.uk/money/ma...08/03/04/cccomms104.xml&CMP=ILC-mostviewedbox

 

[rederob]

Re: OIL AGAIN!

OPEC has held its output steady, clearly signifying it has no interest in global price concerns that could stymie demand.

Kauri's above link is yet another warning that things have got ahead of themselves, and could come back: Similar to warnings that have opened new threads on this forum - and where the markets have shown ongoing disdain for them.

Markets are cyclical, and we would be silly to not be vigilant given oil is at record price levels.
However, my view is always to consider what forces will drive prices in the opposite direction, and what strength those forces have.
Presently there are two major negative forces: Potential demand weakness stemming fro the US subprime fiasco, and the (unknown) contribution of speculation to the fundamental price of oil.

On the first point, given that US oil inventories declined recently when a rise was expected, whatever demand concerns exist, they are not severe, nor are they persistent.
On the point of speculation, if we had significant price volatility in oil on a regular basis, I would say the speculators were important price contributors. Instead the oil price patterns are consistent enough to suggest a reasonably "ordered" oil market where spot and futures are providing market players with confidence rather than concern, albeit the oil price is now very high.

 

[ShareIt]

Re: OIL AGAIN!

OPEC has held its output steady, clearly signifying it has no interest in global price concerns that could stymie demand.

Kauri's above link is yet another warning that things have got ahead of themselves, and could come back: Similar to warnings that have opened new threads on this forum - and where the markets have shown ongoing disdain for them.

Markets are cyclical, and we would be silly to not be vigilant given oil is at record price levels.
However, my view is always to consider what forces will drive prices in the opposite direction, and what strength those forces have.
Presently there are two major negative forces: Potential demand weakness stemming fro the US subprime fiasco, and the (unknown) contribution of speculation to the fundamental price of oil.

On the first point, given that US oil inventories declined recently when a rise was expected, whatever demand concerns exist, they are not severe, nor are they persistent.
On the point of speculation, if we had significant price volatility in oil on a regular basis, I would say the speculators were important price contributors. Instead the oil price patterns are consistent enough to suggest a reasonably "ordered" oil market where spot and futures are providing market players with confidence rather than concern, albeit the oil price is now very high.

I believe a lot of it comes down to T/A with speculators involved... it looks as if this strong support is building around that $100 mark... however a correction is called for as the fundamentals are not supporting price... but until then, ride the way

 

[Smurf1976]

Re: OIL AGAIN!

OPEC has held its output steady, clearly signifying it has no ability to increase production.

No proof but my alteration in bold fits more with what many have been saying for years than some apparent suddden desire to intentionally put themselves out of business as most seem to be suggesting.

 

[rederob]

Re: OIL AGAIN!

No proof but my alteration in bold fits more with what many have been saying for years than some apparent suddden desire to intentionally put themselves out of business as most seem to be suggesting.

Oil hits new record high and presently trades at $107.
GWB is sending VP Cheney to the OPEC big guns to help out:

AFX News Limited
Cheney to urge Saudi Arabia to cool oil prices via OPEC crude production boost 10.3.08, 10:24 AM ET

This might resolve "won't versus can't" increase output.

 

[Uncle Festivus]

Re: OIL AGAIN!

It's a bit like the US Fed, they (the oil producers) have lost control of the situation. The oil price is determined by the specs now as the fundamentals (at this point in time) do not align with price momentum. When the specs hit the exits it will be breathtaking. Until then.......great trading .

PS the oil stocks still lagging the action, still?? What gives? WPL a great day trade these days.

 

[Smurf1976]

Re: OIL AGAIN!

Oil hits new record high and presently trades at $107.
GWB is sending VP Cheney to the OPEC big guns to help out:

This might resolve "won't versus can't" increase output.

I'll consider it proof that they have unused capacity if:

1. The increase is a round figure of at least 0.5 million barrels per day and

2. The increased production is sustained consistently for at least 6 months.

The reason being that any negotiations, political decision etc tends to produce a round figure outcome. If they decided to increase production by 432,754 barrels per day (for example) then that would reek of that being the limit of capacity - negotiations and political decisions just aren't that precise.

Anything less than 0.5 mmbpd could well be surge production (which is not sustainable) or simply emptying storage tanks. Likewise if the increase is not sustained.

If Saudi ramps up to 10mmbpd and stays there through at least 6 months then that's proof IMO. If they just add 0.1mmbpd or only increase output temporarily then that's highly suspicious - drawing down stocks etc.

My best guess is they'll either do nothing (if they really are having serious production problems) or will count new capacity already scheduled to come online as "increased production" carefully not mentioning that declining older fields will mean the boost is temporary.

 

[rederob]

Re: OIL AGAIN!

It's a bit like the US Fed, they (the oil producers) have lost control of the situation. The oil price is determined by the specs now as the fundamentals (at this point in time) do not align with price momentum. When the specs hit the exits it will be breathtaking. Until then.......great trading .

PS the oil stocks still lagging the action, still?? What gives? WPL a great day trade these days.

I don't think the speculators have much control over oil prices at moment.
Furthermore, I believe the oil producers (larger nations and the multinationals) know exactly what they are doing, and that they are using the "fundamentals" to keep prices bidding upwards.
Why so?
The US has no option: It must buy oil because the wheels of its economy will fall off if it does not have enough.
To maintain its oil stocks it needs to keep outbidding other nations, who are also desperate for oil, but literally can't afford to outbid the US. Oil is a sellers market; a producers market, and a speculators playground no more or less than it has been for years.
Yet from a speculators point of view, where black box trading has provided a degree of "predictability", there is now considerable risk as oil keeps moving into uncharted waters.
I won't try to temp an oil price meltdown by saying it won't happen. It surely can, and it might!
But the continuing strength of oil in a global market where recession is impending, and depression not out of the realms of possibility, suggests that there just isn't enough oil to go around.
OPEC used to curry favour with the US in past years by ensuring that any price hikes were checked by rising output. There has been no suggestion that OPEC is even interested in this idea anymore.
Smurf makes some valid points about what we should be looking for, irrespective of any lip service paid by the Saudis.
Next hurdle is $110, and looking like getting there with ease.

 

[numbercruncher]

Re: OIL AGAIN!

Im amazed by the price of oil and how rapidly its getting there, If recession sets in it surely can fall a long way and fast.

 

[ithatheekret]

Re: OIL AGAIN!

I'm amazed at the projection that came out in one of my formulas .

It had oil breaching $350 . That would shoot down the line up for shorts looking for $120-$150 .


Production as stated in one of Reds posts is a clear catalyst , but I don't buy into the latest reports on sand oils , especially the Canadian ones and have used the figures available for the argument against production levels rising .

The last lot of $100 shorts would have seen some quick position closing , could also explain the new high ............

 

[Uncle Festivus]

Re: OIL AGAIN!

Is this phrase correct?

The USA is already in recession.

Is this phrase correct?

The simple fact is, the price of oil has not INCREASED.
The value of the dollar has DECREASED.

Is there too much one way traffic? The data/fundamentals from the regulators themselves.

Increasing speculation
With inflation at their backs and equity markets slumping, investment funds have rushed into the oil market recently.

Recent data from futures regulators showed speculation in the oil market is increasing. Investors have turned to commodities as a safe haven from slumping equity markets and inflation, which is partly fed by the weaker dollar.

Government data showed speculators and managers of large investment funds, those who don't need physical oil, dominated bets on rising oil prices. Refiners and other oil users were betting oil prices would move lower.

The latest data from U.S. Commodity Futures Trading Commission showed long positions from speculators, in which investors expect oil prices to move higher, outnumbered short positions, or bets on lower prices, by nearly 100,000 contracts last week. Net long positions more than tripled in one month.

This was the fourth consecutive week marking an increase in net long positions from financial traders.

 

[Smurf1976]

Re: OIL AGAIN!

Timing of the peak.

The way I see it, it's like the weather. It's now Autumn and while we may still get some very hot weather, it's only a matter of time before the inevitable slide in average weekly temperatures occurs. A chart may well forecast 80 degree days by June but fundamentals say otherwise.

Same with oil. With discovery consistently running below production we're in the Autumn. The weather hasn't cooled yet but that it will is a certainty. You can't produce what has not been discovered and 45 year trends don't generally turn around too quickly.

Flat production 2005 - 2007 despite a drilling frenzy doesn't look good IMO. Running faster and faster to stand still whilst demand keeps marching forward. Hence my long term bullishness on the oil price.

 

[Uncle Festivus]

Re: OIL AGAIN!

Yes, I agree Smurf. My time frame is a little shorter, like day trading, so while cognisant of the 'big' picture I think there is some 'froth' in the short term price. Either way, it looks like directly trading oil is prudent as the oil stocks are not following eg WPL today got hammered. Investors don't see any value there yet???