Oil price discussion and analysis

[Uncle Festivus]

Re: OIL AGAIN!

Oil just needs the FWs to stop invading countries that hold major percentages of the worlds oil and gas reserves .

A simple change in law by Congress with regards to retaliatory powers of a President would have saved the USA billions of dollars . Left 13% of the globes reserves operating and could have had a ceiling for oil placed in the $80's .

Now they will end up with higher welfare payments at a time they needed to restructure them . All in the name of oil .

If we want to really know what oil is going to do , we just need to follow certain countries policies and their administrations agendas .

The cynics amongst us would put 2 + 2 together and come up with a US President with a history in oil, and possibly a vested interest in keeping the oil price high. Would a bunch of not so faceless men use the resources of the military (at no cost to themselves, in fact making billions in the process) and the lives of their fellow countrymen to wage a war so they could get rich? I haven't heard of a valid reason for the invasion of Iraq so far?? They just can't be so silly, or greedy - can they???

So far, the increase in the average price of oil is only? showing up in lower company profits & higher inflation. 110 was starting to hurt and brought on food riots; if the effect of the increasing price of oil is exponential there will be severe collateral damage to the global economy long before it reaches $200.

 

[rederob]

Re: OIL AGAIN!

As per the regulations I'd best show my holdings , looking for a couple of good gas plays ( suggestions welcome )

WPL , BHP , ABB , GNC , IPL , NUF , DXL , ORI , MCC , CEY and ASX since Feb.

Given you mentioned PNG, you should add OSH.

 

[pilbara]

Re: OIL AGAIN!

I haven't heard of a valid reason for the invasion of Iraq so far?? They just can't be so silly, or greedy - can they???

QUOTE]USA has 2% of world oil supply but use over 20%, so oil security is foreign policy #1 priority.

 

[ShareIt]

Re: OIL AGAIN!

in my limited experience, after the second try there's a large downward correction as people lose hope, and this happened to oil at the same time as there was a brief rally in $US. For oil to keep parity while $US rises in value, oil price must fall. Once $US stopped rising, oil was again free to rise and less resistance at $120 than the previous two times. I'd expect a consolidation and next breakout from the $122 to $125.

I won't say the US dollar has stopped rallying.... it looks to be more in a pullback point which is expected after a strong move and a very heathly sign for another leg up

 

[Smurf1976]

Re: OIL AGAIN!

I wasn't considering short turn localized shortages of oil.. I was thinking more from a long term global perspective.

I'll think aloud here for a second and see where I get.

Say there was some supply interruption to Australia that meant there was only 20% of the usual oil supply for a month. This is a pretty bad short term shortage scenario.

The Govt steps in and temporarily sets the price of oil at $10/litre.. people get off their fat @rses and get the bus/train/bike to work and walk to the local shops..

Sure the buses/trains will be pretty damn full but so what if some people get to work late and home late..

I think the bigger issue is the whole economy and society learning to live without oil.. which is why I automatically look at the issue from a long term perspective.

What I'm more worried about is a scenario like that where government or oil companies don't send prices to the moon but instead draw stocks right down hoping the next tanker arrives in time. That's very plausible in my opinion, indeed it's exactly what's happened with minor disruptions in the past.

Overall, I just don't think we're even 10% prepared to cope with any sort of oil disruption. We've got a few days worth of product stored and that's it. Last time a refinery in Vic broke down, we ended up with ambulances running out of fuel. And it's not unusual that Tas and even SA come damn close to running completely dry. If that's any indication then we're headed for outright chaos nationally sometime down the track.

 

[ithatheekret]

Re: OIL AGAIN!

I don't know why QGC is a market darling, but it is. Personally, I think their management are lazy. They tried to sell 20% off at 1.50 for chrissake! I was waiting for them to dip to 2.50 to load up again recently, got that wrong, but have made a lot from them in the past. I just can't see why anyone would buy them now given they are at least 4-5 years away from really making any decent dough. And that even hinges on their LNG plant approval. Considering most others I know are 12-24 months away from really cranking it on, I just can't see the value in that.


Cheers,

I looked at QGC deeply , the market has run with it , but they ran with VCR too ................. I passed on QGC , basically , I agree with everything you've stated in regards to them and some ..............

Hey but how about NUF maaaate $17+ again and look at MCC right up there with em ......... $17+ , CEY fencing with the $5 area again .

I chat myself when OSH hit $5 and sold , did the same the last time it hit $4 for the first time .

FWIW I think IPL will go to $200 , if a distruption in supply occurs anywhere in the world , make that $240-$250 .

WPL at $60 yeeeefknhaaaaa

It's all good , even ASX managed to stay in profit on my slab , the only thing is RIO and FMG , but I couldn't spread the funds that far this time round .
Next time though , FWIW again , I think RIO is headed to $200+ and it's a goldfish compared to the groper that is BHP .

One of my favourites quotes to beginners is , " If you don't stick your neck out , you'll never get ahead ." / " Just make sure you know where your heading ."

Regards ,

Mark

 

[chops_a_must]

Re: OIL AGAIN!

Hey but how about NUF maaaate $17+ again and look at MCC right up there with em ......... $17+ , CEY fencing with the $5 area again .

FWIW I think IPL will go to $200 , if a distruption in supply occurs anywhere in the world , make that $240-$250 .

It's all good , even ASX managed to stay in profit on my slab , the only thing is RIO and FMG , but I couldn't spread the funds that far this time round .
Next time though , FWIW again , I think RIO is headed to $200+ and it's a goldfish compared to the groper that is BHP .

NUF certainly wasn't a bad tip was it? Very very interesting technical times for NUF.

Same for IPL. Is staying level despite bad seasonality for grain prices, and dips in them. Just hope it isn't rolling over.

I'm not sure if you are saying RIO is better than BHP??? Most things I can find out seem to point to RIO being much better right the way down, in terms of their systems, management and procedures in just about every area. I really hope BHP doesn't get them. It will be a disaster. We will have Esperance like problems all around Australia. And no-one can touch them even with the massive breeches they get away with now. The industry is going to cause a lot of destruction to people's health and community welfare, if the biggest boy on the block is seen to not be abiding by any rules.

Back to gas, oil etc. I have between 12.00 and 12.70 as the next target for gas within the month. I know you do projections... got anything for oil? Or any alternates for gas?

 

[rederob]

Re: OIL AGAIN!

Just for interest:

 

[rederob]

Re: OIL AGAIN!

Another day, another record close; with chart attached so I can Share It:

 

[ShareIt]

Re: OIL AGAIN!

Another day, another record close; with chart attached so I can Share It:

haha your funny... like the quote

An impressive run, I never play the commodity itself but rather the stocks... and I am still sticking to my guns on the turn sometime soon as commodity stocks seem to be putting a short term top in place (starting to see some weakness... and yes, I know I am stubborn).... and usually I have noted that the commodity stocks are the first to drop or rise before the actual commodity.... I like to think of it as negative (or positive) divergence, when commodity stocks start to head lower but oil heads higher

 

[rederob]

Re: OIL AGAIN!

$125 and climbing.
Come on teccies, when's it going to stop........

 

[wayneL]

Re: OIL AGAIN!

$125 and climbing.
Come on teccies, when's it going to stop........

It is my expert technical opinion that oil will stop going up when it starts going down.

Meanwhile, this techie is happy to trail a stop.

 

[Uncle Festivus]

Re: OIL AGAIN!

Another day, another record close; with chart attached so I can Share It:

Would you believe $126? That chart reminds me of the saying - 'Up by the stairs, down by the firepole' or sim. Nice predictable stair pattern - who's gonna blink first?

 

[ShareIt]

Re: OIL AGAIN!

I think the fall is today

 

[chops_a_must]

Re: OIL AGAIN!

$125 and climbing.
Come on teccies, when's it going to stop........

I'm looking at just over 130 for oil. Nat Gas for mine has a slightly higher target.

Fundamentally it could go much higher. Even at these levels, supplies simply aren't keeping up. When you have the Saudi oil minister saying things like, "We don't have a problem with supply, we just can't keep up with demand", you know you have problems. Price thus far hasn't dampened the world's thirst for it.

Would love to see what happens if we get an acknowledgement of peak oil. You a peak oiler red?

 

[Kauri]

Re: OIL AGAIN!

Here's a relatively easy one for the people who fundementally follow oil... my beaten up old car is nearly empty of petrol..(if the guage is still working.. ).. when ... in the next 12 months... would it be best to head off to the local to fuel up???...
anxiously and eagerly awaiting a fundement al reply
...................Cheers
.........Kauri

 

[acouch]

Re: OIL AGAIN!

some idea where it is heading
ac

 

[rederob]

Re: OIL AGAIN!

Here's a relatively easy one for the people who fundementally follow oil... my beaten up old car is nearly empty of petrol..(if the guage is still working.. ).. when ... in the next 12 months... would it be best to head off to the local to fuel up???...
anxiously and eagerly awaiting a fundement al reply
...................Cheers
.........Kauri

It's too easy.
There is no "best time" any more.
You will need to believe that petrol prices will come down.
In Australia that will not happen unless the refiner margin increases as at the moment there is marginal profit and considerable regulation (plus taxes).

I know wavepicker thinks there is antagonism between the two camps. This could be because there is a tendency for teccies to be fair weather sailors - calling shorts when markets are significantly overbought. While the strategy may sound good, when commodities power into bullish modes they appear to have a capacity to run "over-extended" for longer than equities typically would.
Furthermore, unlike equities - where we can measure forward profitability to determine reasonable pricing - commodities have complex global factors driving their prices. With oil at present you will be hard pressed to find an analyst that believes fundamentals are the principal contributor to higher prices.
That does not mean high oil prices are not justified. It does mean that speculators believe higher prices are more sustainable than they ever were, and are willing to bet some money on it.

The most curious aspect of the price runup over the past few weeks has been its lack of volatility as the price ran higher. There seems little logic to an orderly rise when prices push day after day into blue sky territory. Anyone with an explanation................

 

[Aussiejeff]

Re: OIL AGAIN!

Here's a relatively easy one for the people who fundementally follow oil... my beaten up old car is nearly empty of petrol..(if the guage is still working.. ).. when ... in the next 12 months... would it be best to head off to the local to fuel up???...
anxiously and eagerly awaiting a fundement al reply
...................Cheers
.........Kauri

Now, Kauri, do it NOW!!!! If what I have posted below is TRUE, then go fill the lil' ol' beastie NOW......

Just heard on ABC Radio news that some oil processing platform/transfer vessel in NW shelf is to be shut down immediately due to safety concerns! Now THAT won't help the local oil/fuel scene. I can't find ANY link on the Web apart from this one - am I pointing in the right direction?

http://www.bloomberg.com.au/apps/news?pid=20601081&sid=aKNmSuc8phd8&refer=australia

I'm presuming the 2-3 month disruption referred to in this article for the planned refurbishment or replacement of the Cossack Pioneer in 2009 has been brought forward, due to the recent inspection team's safety concerns? Can anyone enlighten me with further info regarding imminent shutdown? Hope I'm proved wrong with this headline....

 

[ithatheekret]

Re: OIL AGAIN!

Back to gas, oil etc. I have between 12.00 and 12.70 as the next target for gas within the month. I know you do projections... got anything for oil? Or any alternates for gas?

It's a struggle to keep up with the shifting parameters lately . Variables , well there's plenty to go about , but then isolating any of them is another huge task .

From what I can assume at present , we hit another peak in production a few years ago . Gas with regards to the US and Europe in my view has already peaked also .

If I am somewhere near being right , the ongoing decline in production is the next catalyst to give the price the heebee geebees .

I believe the emphasis on US consumption is wrongly placed , as I believe Europe to be the main contributor to rising prices from the Western side . Gas is already under stress due to Europe and the added weight of US consumption only compounds the problem ....... then just add Asia , for an instant price shift .

Due to this , I see Gas playing the field , with a sharper rise expected than some would think . Oil is stuck in a bad spot , further production declines are the real worry that we need to bring a stick out to , but good luck with that .

Gas anywhere near $17 in the next few years would not surprised me , but oil stuck above $100 is not a good look with production waining . No OPEC spin will help the price out , no Administrations spin will conquer that lack of product . The high costs involved with gas are not a comforting factor either .

I am yet to see a fundamental arguement that supports a lower oil price , all I've heard to date are aspirations , nothing viable though , just noise .

That has me questioning when , not if , the oil price will be catapulted towards higher prices over the next ten or so years . Production numbers look glued for the period and with a growing user line up eating at the edges , the price is due for further shocks upwards .

My average price so far is $108-$112 for oil and $11.80-$12.40 for gas , which I have through to 2009 so far , and that's the good news .

Is oil being technically driven ? I don't think so at all . The only technicals actually taken note of were pre $100 .

But then , I believe there is a vested interest in keeping the price high , one that administrations can't contain .

At present I keep seeing the push towards $150 , but then this is just a position on the prices chart . I have a range between $138-$146 price in my model and that's $10 - $20 above prices achieved to date .

One heck of a macro problem for the globe to get over and I can't hear any fat lady singing yet ...............

There's a lot of screaming going on though , with more to come I would imagine .