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- 10 July 2004
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He's got a great track record -
Self perpetuating bull ramp speculation?
Which is it - demand or a $US play?
Where are these demand figures that seemingly go up every day??
I have heard this year there's has been a 95 percent correlation between $US and Euro exchange rate movements, and the price in $US of oil. Hedging $US is a major factor in the oil price.Which is it - demand or a $US play?
If you look at price action, prices have been constantly increasing.
wavepicker's retrace to the "teens" before another rally never occurred.
Another record close overnight - $129.01 as I post and knocking on the door of $130
What goes up must come down...
The demand for oil is unresponsive to price increases, it's inelastic demand, so we need very large price increases for demand to fall significantly. In the commercial sector there is already a major trend towards substitition of oil to natural gas, which is now the hottest energy sector.
http://www.bloomberg.com/apps/news?pid=20601087&sid=a79UU6p.il.s&refer=homeThe struggle to find oil coincides with a boom in demand from places like China and the Middle East, where it will rise 4.9 percent this year, making up for a drop in demand from North America and Europe, the International Energy Agency said in a report May 13.
Isn't substitution responsive?? Each dollar it goes up someone either has to pay more for something or someone else gets less profit (apart from the suppliers), to the point where it's unprofitable eg airlines going bankrupt or passing the costs on resulting in fewer customers and so on down the line.
The daisy chain negative vortex sucking the global economy down?
May 21 (Bloomberg) -- Oil prices are heading to almost $140 a barrel in the next eight years, according to futures contracts on the New York Mercantile Exchange, on concern that growth in supply may fail to keep pace with rising demand.
Oil for delivery in December 2016 surged $17.08, or 14 percent, in the three trading days since Goldman Sachs Group Inc., the world's biggest securities firm by market value, forecast oil would average $141 in the second half of 2008 on constraints in production and a lack of substitutes. Crude for July 2008 climbed 1.9 percent in the same period.
Looking forward to $150.00 oil and cracking the top off one of Wavepickers beers, if we break $130.00 tonight a change of underwear could be in order for the shorters.....................
'Just get ready.... the more I see it go up, the bigger the smile on my face', must agree with you there Shareit, my Cue Energy Resources shares are well on their way to showing me a 200% profit.
Its been a dream ride.................and i reckon there is plenty more in the tank yet!
The smaller oilers are going to need to be revalued if oil holds above $120.00 or increases towards $150.00. CUE based there revenue projections on $55.00 a barrel, not much more needs to be said.
JW - happy days
LONDON: Opec yesterday trimmed its forecast for global growth in oil demand in 2008, the latest sign that record oil prices are slowing consumption in the industrialised world.
Bush's reversal came on the day that Saudi Arabia announced that it was increasing its output by 300,000 barrels a day for the month of June
Oil markets treated both announcements skeptically
I was an oil trader and this contango is not, I repeat NOT a positive sign for the oil market.
When the prompt price of any commodity falls below the futures price that is a strong fundamental inidicator that people who wish to buy real physical commodity for real immediate use are not concerned about the availability of supply. If people were concerned then the market would be in a very strong backwardation - with prompt prices far higher than futures prices. It has not been in that position for the whole of the last year. This rise in futuires prices is purely speculative in my view.
In the case of the fundamental physical oil market we know that US refineries are not running at full capacity, we know that Iran is storing heavier crudes on oil tankers because they cannot find a market for it.
The run up in futures prices is being driven by speculative investors who have absolutley no intention of taking delivery of that oil or have any physical end use for it.
We also know that real physical oil demand in the US is below that of last year. High prices are doing their work - creating a slump in demand at the same time as new capacity is being brought on the market.
I expect a very sharp and rapid collapse in the oil market when speculators attempt to close their positions.
At the moment it costs about 10c per barrel per day to store oil and no one wil be able to just take delivery and hope for the best - futures positions will have to be closed as the price slumps and I fully expect to see the NYMEX go limit down with positions being forced to mass liquidation and bankruptcies of some speculative funds.
I have a vested interest in taking this view point and no one should be under any illusion that I know anything 'secret'. This is a high risk market and not one that anyone should take positions on unless thay are willing to accept very severe losses. My positions are in long dated put options - I am expecting a very large 'black swan' event drop in prices at some point but the timing is very uncertain. Fundamentals are ultra bearish in my view but the timing of the sell off to return the market to fundamentals cannot be predicted.
They will pass it onto consumers
Thing is Australian's have accumulated quite a bit of wealth over the last few years, so these higher costs wont be felt as such, maybe later on
thx
MS
Just a point that most won't have noticed, oil futures have gone into contango right throughout the whole strip. This is not normal for oil, backwardation is normal.
http://www2.barchart.com/dfutpage.asp?sym=CL&code=BSTK§ion=energies
Make of that what you will.
** Contango => deferred contracts are more expensive as you get further out in expiry
** Backwardation => deferred contracts are cheaper as you get further out in expiry
Good point Wayne, this is genearlly bullish is it not?
Not sure how long Contango has been in effect, but I just noticed the same earlier this afternoon......
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