Oil price discussion and analysis

[numbercruncher]

Re: OIL AGAIN!

Demand being destroyed as widely tipped !

A report from China on Monday that the country's crude oil imports in July were down 7% from last year fueled expectations that the economic slowdown affecting the U.S. and Europe may be spreading to Asia and cutting demand for oil.

http://money.cnn.com/2008/08/12/markets/oil.ap/index.htm

 

[Whiskers]

Re: OIL AGAIN!

Demand being destroyed as widely tipped !




http://money.cnn.com/2008/08/12/markets/oil.ap/index.htm

Yes, I think you're right there, numbercruncher.

What with the big US car makers scraping those big gas guzzler models and bringing in more smaller engine models overall demand will probably stay pretty flat for a couple of years.

But I hear a lot of talk about switching a lot more public transport to gas or electric in the coming years also.

The days of oil as first choice energy source are on the way out I'm afraid.

 

[Tysonboss1]

Re: OIL AGAIN!

But I hear a lot of talk about switching a lot more public transport to gas or electric in the coming years also.

The days of oil as first choice energy source are on the way out I'm afraid.

Use of alternatives is fantastic, stable energy prices is good for every body, However what generally happens is that once the oil price stabilises peoples attention is taken away from these alternatives and they get forgotten, atleast until the next oil shock.

 

[Whiskers]

Re: OIL AGAIN!

Oil is just about to go poof... wooosh... gurgle, gurgle, again.

I'll give it til 119, 120 at most... then look out 100.

 

[CanOz]

Re: OIL AGAIN!

Oil is just about to go poof... wooosh... gurgle, gurgle, again.

I'll give it til 119, 120 at most... then look out 100.

Yep, and the buck is correcting.

 

[MRC & Co]

Re: OIL AGAIN!

I'll give it til 119, 120 at most... then look out 100.

Double top formed tonight so far. Some strong resistance came in on the cent! Nice fade play!

Well fade just got stopped out with a change in position after it broke above, nice breakout to catch even if it was a bad fill! Quick scalp, nothing more in this environment!

 

[wayneL]

Re: OIL AGAIN!

Oil is just about to go poof... wooosh... gurgle, gurgle, again.

I'll give it til 119, 120 at most... then look out 100.

Maybe we should give it till 130?

...140?

...250?

 

[wayneL]

Re: OIL AGAIN!

One blokes view (not that I necessarily agree will it all):

http://www.citywire.co.uk/personal/...unds/content.aspx?ID=312001&re=3545&ea=199083

The Daily Interview: Commodity correction nothing to do with fundamentals, says JPM fund's Henderson

By Danielle Levy | 12:16:00 | 21 August 2008

JPM Natural Resources manager Ian Henderson believes the upward trend in energy prices is set to continue, seeing the recent sell-off in commodities as a short-term situation caused by forced selling.

Henderson (pictured), who is Citywire A-rated, says the recent correction in commodities prices does not take into account continued demand from the emerging world and is more an over-reaction to global financial markets and negative statistics from the US and Europe. ‘Today the emerging world is where all the growth is coming from,’ he says.

He does not see any evidence that China is facing a slowdown in growth. In fact, he labels bottlenecks in energy supply as the main problem for the emerging markets rather than a decline in demand growth.

Henderson believes recent commodities price falls are a result of forced selling by investors in the ‘flip flop between banks and commodities stocks’, as he calls it.............................

 

[Aussiejeff]

Re: OIL AGAIN!

Demand being destroyed as widely tipped !




http://money.cnn.com/2008/08/12/markets/oil.ap/index.htm

Maybe part of the reason for demand slow down in China in July is simply a result of their Big Push to lower pollution in Beijing during the Olympics? August figures might show the same reduction. We're talking *millions* of vehicles being taken off the road at the moment. Has to have some effect, surely?

Hmmm. I also wonder whether their Oct/Nov "oil demand" stats will jump again when all of Beijings factories and motorways ramp back up to the max, post Olympics?




aj

 

[Whiskers]

Re: OIL AGAIN!

Maybe we should give it till 130?

...140?

...250?

Nah, I'm still going with a minute abc in a minor 5 wave down. That will probably be a minor wave A... but it won't make much difference if this is a minor ABC forming now. It'll just be a more complex intermediate and primary corrective waves, down to the same area.

One blokes view (not that I necessarily agree will it all):

http://www.citywire.co.uk/personal/...unds/content.aspx?ID=312001&re=3545&ea=199083

I agree that there's been some forced selling, but I think it will go more back into equities.

Agree also that bottlenecks in supply is probably the biggest problem looming for commodities, particularly coal, iron ore and natural gas.

All in all though, I think the wheels are finally in motion, particularly in the US to reduce oil consumption and also to decrease their dependence on foreign oil, if the reported bids for new liscenses in the Gulf of Mexico is anything to go by.

 

[wayneL]

Re: OIL AGAIN!

Nah, I'm still going with a minute abc in a minor 5 wave down. That will probably be a minor wave A... but it won't make much difference if this is a minor ABC forming now. It'll just be a more complex intermediate and primary corrective waves, down to the same area.

I vehemently disagree.

I think it's part a complex wave X; a wave 3 of a larger degree wave C flat of a larger degree Wave B triple zig-zag of a larger degree wave 2 of a leading diagonal.... ummm where am I?

 

[GreatPig]

Re: OIL AGAIN!

You missed the bit about the moon being in the 7th house and Jupiter aligning with Mars... oh sorry, that's Gann I believe, not EW.

Might make a good stage show though...

GP

 

[Stillworkin]

Re: OIL AGAIN!

Please explain

If China has closed so many factories and reduced car usage etc for olympics? how can their demand reduce after the olympics? Surely it must increase as all the workers go back to work!

As we are now entering summer in Oz, and winter in the north. How can demand in the most populus part of the world ie the north increase and have no effect on price.

Also what OPEC country recently said they would table reducing production at the next OPEC meeting?

Gee Russia has made a grab for the oil pipeline into Europe? Do you think they will increase the cost or reduce it?

Isn't this the tornado season in the gulf of Mexico? Do you think we will go the whole cyclone season with no interuption to supply.

Oh yeah and that whole debate with Iran re nuclear thing. Is that really over?

I love technicall analysis. The whole embedded stochastic looks great. But is their more to this?

PS the bars open. Beers are my preference

Stillworkin

 

[rederob]

Re: OIL AGAIN!

This Week In Petroleum
Released on August 20, 2008
So, where do we expect prices to go from here? While we are not quite as confident in forecasting the near-term path for oil prices as Michael Phelps might be about winning his next race, we do think that crude oil prices may settle in the $120 - $130 per barrel range for most of the remainder of the year, barring any additional major supply disruptions from hurricanes or other events such as the current conflict in Georgia. This is largely due to our projection that year-over-year declines in U.S. oil consumption will not be as large in the second half of the year, in part due to relatively weak consumption in the second half of last year and also to the perceived end of the upward surge in prices. Balancing out the forecasted decreases in U.S. consumption, we project relatively strong continued demand growth in non-OECD countries. Finally, as prices drop, Saudi Arabia may cut back on its recent increase in production, which could halt the most recent price decline. Of course, whether or not this scenario unfolds is anyone’s guess, but understanding the factors behind the increase and recent decline in oil prices is important in understanding what might come next in the prices we pay at the pump.

The principal difference between oil and the metals in the commodity stakes is that it's relatively easy to respond to metal demand. This was not always the case, as oil supply until 2005 was just a matter of filling the tankers and sending them on their way.

With Angola, Iraq and the Saudis being about the only nations that can meaningfully increase output in a world where production peaks have set well in, it does not take much nowadays to spike oil prices. It takes a little more for the speculative longs to unwind positions and force prices back down. The volatility of this theme will increase over the next few years as it becomes ever clearer that the supply tap is wound almost to capacity.

But back to the above quote for a moment. When the world's greatest oil consumer comes out and suggests that we are destined for prices in the present range and higher for the rest of the year, you must wonder what they are thinking about in terms of next year's prices.

At present I favour a relatively flat to declining demand response from Western nations, and a continuing demand increase from the emerging economies regardless of global economic conditions. I believe average oil prices will increase by about 20% next year under these conditions.

Irrespective of pump prices, the cost of oil extraction will increase dramatically in coming years as the next wave of oil supply will come from both offshore and deeper drilling activities. All aspects of the supply curve - exploring, producing and landing - must add significantly to per barrel costs. Ultimately these costs will be expressed at the bowser until demand destruction is matched by the essential needs of users and we reach a price equilibrium. My sense is that this is around 5 years and another $100 dollars a barrel away. Until then, I will not be quitting any of my oil equities.

 

[CAB SAV]

Re: OIL AGAIN!

The principal difference between oil and the metals in the commodity stakes is that it's relatively easy to respond to metal demand. This was not always the case, as oil supply until 2005 was just a matter of filling the tankers and sending them on their way.

With Angola, Iraq and the Saudis being about the only nations that can meaningfully increase output in a world where production peaks have set well in, it does not take much nowadays to spike oil prices. It takes a little more for the speculative longs to unwind positions and force prices back down. The volatility of this theme will increase over the next few years as it becomes ever clearer that the supply tap is wound almost to capacity.

But back to the above quote for a moment. When the world's greatest oil consumer comes out and suggests that we are destined for prices in the present range and higher for the rest of the year, you must wonder what they are thinking about in terms of next year's prices.

At present I favour a relatively flat to declining demand response from Western nations, and a continuing demand increase from the emerging economies regardless of global economic conditions. I believe average oil prices will increase by about 20% next year under these conditions.

Irrespective of pump prices, the cost of oil extraction will increase dramatically in coming years as the next wave of oil supply will come from both offshore and deeper drilling activities. All aspects of the supply curve - exploring, producing and landing - must add significantly to per barrel costs. Ultimately these costs will be expressed at the bowser until demand destruction is matched by the essential needs of users and we reach a price equilibrium. My sense is that this is around 5 years and another $100 dollars a barrel away. Until then, I will not be quitting any of my oil equities.

I tend to agee with what you thoughts are. In regards to oil companies, I prefer the big boys like WPL,STO,OSH & AWE. Oil may have dropped off a bit lately, but so has our dollar,so has oil fallen? The smaller companies and their shareholders will suffer as you pointed out, costs keep rising.

 

[Whiskers]

Re: OIL AGAIN!

I vehemently disagree.

I think it's part a complex wave X; a wave 3 of a larger degree wave C flat of a larger degree Wave B triple zig-zag of a larger degree wave 2 of a leading diagonal.... ummm where am I?

LOL I bludy hope not. It'll take me a month of sundays to figure that one out.

Since I've been doing my homework and studying damn hard, I'm gonna have a shot at $105/6 for the end of this five minor waves down, obviously based on the length of the previous waves which just happens to coincide with support.

Probably due to call that the first corrective leg A... cos if we don't get a corrective leg soon it could go worthless, negative value, before all these cycles unwind seeing as it seems the top was a supercycle (I)

So it looks like we're gonna be stuck with the POO going sideways between say 105 and maybe 120 for a few weeks while it sorts out a corrective pattern, say B leg.

 

[deadset]

Re: OIL AGAIN!

This response is based on my gut feel only after observing related events.

It looks like oil wants to get down to at least $105, but there has been an event almost every second day since it hit $114 which has temporarily halted the falls. Georgia, 3rd Hurricane risk in the Gulf since then, BP pipeline getting turned off, then reopened, Russian delays withdrawing and verbals via media. Wether it ever gets there, depends on how quiet the related news is.

So, as soon as the Hurricane clears, assuming it does no damage, I'd expect it to fall in the near term. But now its Spring in the Northern Hemisphere, so I'd expect it to rise back to around $120. $125 seemed the highest for the market to bear last time before it caused too many problems above this level. No point getting great returns on oil if it kills everything else in the process, that will plummet demand.

My feeling is that $125 causes market and financial problems for the world, replacement technologies will rapidly develop at this level. Oil producers know this and won't want to see prices above $120, otherwise the replacement technologies kill their goose quicker than need be.

Medium Term : Russia/Georgia ok ?

Long Term : Obama declarred his intention for "energy independance" if he wins. That's a HUGE statement if you missed it yesterday.

Oil and Commodities, they are decoupled now for normal price changes, but large swings in oil affects everything.

---------
verbal - Aussie slang for argumentative dispute.
goose - you know the Goose that lays the golden eggs, that goose.

 

[Kauri]

Re: OIL AGAIN!

The UAE C/B Gov has noted that he sees oil prices moving back into a $60/80 band and that there are "more reasons to stick with USD pegs" now that the US unit is strengthening. and I'm buying that line..

Incidentally...UBS is recommending gold for a target of 850...

Cheers
.........Kauri

 

[Whiskers]

Re: OIL AGAIN!

The UAE C/B Gov has noted that he sees oil prices moving back into a $60/80 band

I like these fellas. They agree with me.

Incidentally...UBS is recommending gold for a target of 850...

Don't like that though... at least not for a week or two.

Meanwhile, it's looking like THE POO has snuck in a little i, ii, in the shadow of that abc.

As soon as Gustav nicks off, I'd say she is gonna finally rip her fingernails out and break loose for a new low.

 

[rederob]

Re: OIL AGAIN!

As soon as Gustav nicks off, I'd say she is gonna finally rip her fingernails out and break loose for a new low.

I'm sure you mean a short-term cyclical low!
Gustav is Category 4 and will intensify over the next 24 hours.
Chances are that it can make landfall in region nearby to where Katrina struck, but at intensity 5: Katrina struck New Orleans at intensity 3.
Irrespective of possible damage directly from Gustav, GOM rigs will shut it most oil output over the next few days, and there is a chance that Bush will immediately release some oil from the strategic reserve.
These actions will ensure the oil price first spikes higher on Monday, and then stay high until US data on inventories shows a return to normal - possibly in the next fortnight.
Should Gustav knock out refining capacity through a direct hit, then expect a return to plus$130 prices for a while.

Aside from Gustav, US inventory data has been subdued given the slowdown of its economy and some demand destruction in the transport sector in particular. What is important in reading the data is that most analysts take the year-on-year changes as best indications of trend. And in this regard we are now getting into the period a year ago whereby the "slowdown" was gathering pace.
Accordingly, if new data is not showing inventory builds from a year ago, then the US will be in diabolicals when, eventually, its economy does recover.
Whatever Whiskers might hope for in the short run is getting increasingly less likely as weeks pass. The only ray of hope for oil is that the US goes to hell in a handbasket more quickly than most expect: Only then would we have a meaningful global surplus of oil for an extended period, before the rot truly settles in (and the oil price takes off again).