Oil price discussion and analysis

[MRC & Co]

Re: OIL AGAIN!

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???

Yeh, these booming commodity equities are really being held back at the moment by the negative sentiment in the stockmarket in general.

 

[ithatheekret]

Re: OIL AGAIN!

.......... and Woodside is paid in AUD for its oil , that puts it well over the US price , but the US is getting very cheap LPG and has been for sometime now .

 

[rederob]

Re: OIL AGAIN!

.......... and Woodside is paid in AUD for its oil , that puts it well over the US price , but the US is getting very cheap LPG and has been for sometime now .

Isn't the question now, about the price of natural gas?
Although gas can act as an energy substitute for oil and coal, the reality is that you can't simply fill up tomorrow with lpg if your car has a petrol engine!
Of course the changeovers can be made, over time, and gas can take a higher profile.
The other reality is that as demand for gas increases, so too will its price.
And just as oil has peaked, so too will gas peak.

 

[ithatheekret]

Re: OIL AGAIN!

Taadaa , we finally totally agree on something Red , we're getting somewhere cobber .

Gas is my next pick for the run up . Got to get the gas off before we can extract the oil , still think the North Shelf projects are selling it too cheap via antiquated contracts going back aways now . Chevron getting out of other projects to concentrate on an LPG project .........

Santos should have bought OilSearch and coughed up the $2 / share

OSH may swoop on some of those Chevron offerings ..............? An assumption on my part , bit like the Oxiana swoop on the predator Zinifex ......... f..... marvellous . I'd like to see Lihir take Highlands and diversify further .

 

[Smurf1976]

Re: OIL AGAIN!

Isn't the question now, about the price of natural gas?
Although gas can act as an energy substitute for oil and coal, the reality is that you can't simply fill up tomorrow with lpg if your car has a petrol engine!
Of course the changeovers can be made, over time, and gas can take a higher profile.
The other reality is that as demand for gas increases, so too will its price.
And just as oil has peaked, so too will gas peak.

Agreed though I must point out that LPG is generally considered to be "oil" and not "gas" since it is (1) partly derived from crude oil (2) is a liquid fuel and (3) is used in a manner comparable to other liquid fuels but very different that of natural gas.

The oil production figures etc that you see quoted generally include LPG.

The level of LPG use, especially in the petrochemicals industry, is such that the spot LPG price is effectively tied to the spot oil price.

The linkage to natural gas is really only there in a high gas price market - if LPG or fuel oil are cheaper than natural gas then that will tend to cap the natural gas price under most circumstances.

 

[chops_a_must]

Re: OIL AGAIN!

Anyone else looking at a short on oil? Looks like an off shape head and shoulders pattern.

A close below 100 and it might take a look at 90.

 

[rederob]

Re: OIL AGAIN!

Anyone else looking at a short on oil? Looks like an off shape head and shoulders pattern.

A close below 100 and it might take a look at 90.

A good day to seriously look at shorting oil!

 

[Tysonboss1]

Re: OIL AGAIN!

hows my $80 line looking,...

 

[rederob]

Re: OIL AGAIN!

hows my $80 line looking,...

As safe as (American) houses!

 

[Uncle Festivus]

Re: OIL AGAIN!

Things starting to hot up with oil again, getting closer to global growth capping territory ie a real economy recession. US pump prices biting even harder -

Crude oil for May delivery rallied more than $2 to the new high before closing up $2.03, or 1.8%, at $113.79 on the New York Mercantile Exchange, also a closing high.
At the pump, the average U.S. retail gasoline prices rose to a new high of $3.386 a gallon, up 1.3 cent from the day before and well ahead of the month-ago price of $3.285 a gallon, according to the AAA Daily Fuel Gauge Report.
Last week, a U.S. energy administration said gasoline could surpass $4 a gallon in some areas in the upcoming driving season.

Local prices now $1.50/l, about where the consumer starts to think twice about that trip to the country, or maybe even start to plan things to conserve energy. Nothing like a recession caused by high energy prices to force energy conservation?

 

[Kauri]

Re: OIL AGAIN!

Things starting to hot up with oil again, getting closer to global growth capping territory ie a real economy recession. US pump prices biting even harder -

?

Also weather in the Gulf has closed some Mex ports, curtailing 80% of their exports, along with a now repaired problem at a refinery in the US... should/could affect the DOE report that is due??
Cheers
..........Kauri

 

[Smurf1976]

Re: OIL AGAIN!

Oil prices have held up incredibly well compared to practically everything else. Worries about recession, falls in shares, gold etc but oil remains at or near record highs. Certainly looks like a strong market situation to me.

As for the "there's plenty of oil" argument, that seems to focus heavily on US stocks whilst ignoring the gap between production and consumption over the past 18 or so months. Someone has been heavily drawing down stocks over that time since US data doesn't show a sufficient fall. Questions being who and how much more do they have left?

Meanwhile Japanese power stations are adding to demand with a major nuclear plant offline for quite some time (year or so) to come.

 

[Kauri]

Re: OIL AGAIN!

The part of the equation that always intrigues me is just how much of all commodities do hedgie types have locked up?? Would their holdings affect the supposed supply/demand eqution?? I really have no idea..
Does oil form into a bubble easily, or is it too viscous??

Cheers
............Kauri

 

[rederob]

Re: OIL AGAIN!

The part of the equation that always intrigues me is just how much of all commodities do hedgie types have locked up?? Would their holdings affect the supposed supply/demand eqution?? I really have no idea..
Does oil form into a bubble easily, or is it too viscous??

Cheers
............Kauri

Hedge funds are not producers.
They have nothing "locked up".
Therefore, their impact relates to price action.
Given that prices can impact supply or demand, where commodity price levels are sustained, producers can act in their best interests.
Similarly, producers can influence prices through market participation, and they do.
Importantly, where the commodity is scarcely able to satisfy demand, their physical reactions can be more powerful than mere speculative influences.
Wherein the conundrum lies.
Funds speculate on fundamentals.

 

[ithatheekret]

Re: OIL AGAIN!

Bizzillionaire Pickens has cancelled his shorts and gone long .

 

[rederob]

Re: OIL AGAIN!

Bizzillionaire Pickens has cancelled his shorts and gone long .

The short covering game in oil is sending speculators broke. It's almost a case of Chinese water torture....

 

[JeSSica WaBBit]

Re: OIL AGAIN!

Oil hit $117.00 a barrel..................go oil!!!!!!!

 

[numbercruncher]

Re: OIL AGAIN!

Starvation, food riots, cropland to biofuels , going to be an interesting and painful future if this game continues.


nooone thinks Oil is looking toppy ?

 

[rederob]

Re: OIL AGAIN!

tysonboss
Although not discounting a chance return to $80, the likelihood is rarer by the week.
The chart below shows a rate of incline of moving averages that is increasing.
If we were to assume (for discussion only) that yesterday was oil's near term peak, then we would expect a probable new low (support point) within 6 months.
Given the market is in strong buying mode it is difficult to see what would or could trigger any sustained price decline.
Oil is not gold and the "you can trade any commodity" argument becomes fanciful to the extent that there is a fundamental demand equation underpinning price action.
In this case we have suppliers either squeezing oil, or they may be simply unable to increase output to meet global demand. I think there are feet in both camps.
Non-OPEC production appears to be severely constrained - perhaps diminishing.
High oil prices that supposedly are getting high cost projects into production are not materialising with meaningful contributions to global supply.
Increased exploration expenditure is less and less successful as all the known areas are well drilled and low probability, low resource outcomes are the rule of the day.
Exploration is tending to high risk, high cost projects on the chance of getting lucky.
Little wonder its the likes of WPL and OSH, with strong reserves and good production profiles, that are powering our equity market.
I think I last year tipped oil to average at $120 this year. It was intentionally provocative. Lest we get a sharp correction soon, it's 2008 average price - which is about $100 - looks like being a near term benchmark, with good prospects of rising steadily higher.

 

[Smurf1976]

Re: OIL AGAIN!

Starvation, food riots, cropland to biofuels , going to be an interesting and painful future if this game continues.

Long term it will continue. Short term anything's possible but as far as the logn term is concerned, this has been inevitable since the first well was drilled nearly 150 years ago. It's a finite resource...