Oil price discussion and analysis

[Uncle Festivus]

Re: OIL AGAIN!

Some good volume last night. As many contracts traded as on the 1st when the busting of the rouge trades took place.

Probably just the busting of the trades put on following the busting of the rouge trades which caused the false break. :

Is that like when some women with rosy cheeks get together and trade in a pack to manipulate the market?

 

[Trembling Hand]

Re: OIL AGAIN!

Is that like when some women with rosy cheeks get together and trade in a pack to manipulate the market?

yes they were trades that went very red.

 

[MRC & Co]

Re: OIL AGAIN!

Some good volume last night. As many contracts traded as on the 1st when the busting of the rouge trades took place.

Probably just the busting of the trades put on following the busting of the rouge trades which caused the false break. :

ha ha, very cheeky TH! I know, you know, what I know!

But that rogue trader was a mini fish.

I really think this G8 sentiment and then subsequent 'action' or at least talk of and signatures, is affecting price right now. Just saw China and India also came on board last night....

 

[Smurf1976]

Re: OIL AGAIN!

Sheesh! Is this oil sell-off a result of the G8 committment to reduce emissions? It's the only thing I can think of.

If emissions are cut then, strange though it may seem, oil prices ought to go up in the medium term rather than down.

Most emissions cuts would likely be from power generation, households, industry etc. That's coal and to some extent gas consumption, not oil.

But all the non-conventional oil production such as tar sands, shale, coal liquefaction etc becomes either far more expensive or off limits altogether if we're cutting emissions. That's most future supply sources...

So, a bit of a cut in demand but with China, India etc total consumption would almost certainly continue rising. Meanwhile new supply sources get hit hard, especially the big ones like tar sands.

 

[MRC & Co]

Re: OIL AGAIN!

Ah, interesting, thx Smurf. Definately something to consider over the medium-term. But I think short-term, this is just being driven by sentiment.....

 

[sam76]

Re: OIL AGAIN!

Time to buy that V12 according to this bloke


Verleger Predicts $20 Oil This Year on ‘Devastating’ Crude Glut


By Grant Smith

July 16 (Bloomberg) -- Crude oil will collapse to $20 a barrel this year as the recession takes a deeper toll on fuel demand, according to academic and former U.S. government adviser Philip Verleger.

A crude surplus of 100 million barrels of will accumulate by the end of the year, straining global storage capacity and sending prices to a seven-year low, said Verleger, who correctly predicted in 2007 that prices were set to exceed $100. Supply is outpacing demand by about 1 million barrels a day, he said.

“The economic situation is not getting better,” Verleger, 64, a professor at the University of Calgary and head of consultant PKVerleger LLC, said in a telephone interview yesterday. “Global refinery runs are going to be much lower in the fall. If the recession continues and it’s a warm winter, it’s going to be devastating.”

more here:
http://bloomberg.com/apps/news?pid=20601087&sid=auTu3RI8WC1A

 

[gooner]

Re: OIL AGAIN!

Time to buy that V12 according to this bloke

Verleger Predicts $20 Oil This Year on ‘Devastating’ Crude Glut

My share portfolio will be a small fraction of its current value if $20 oil comes to bear, as I only hold energy shares (oh and $1k each of GMG and MIG, in case of a SPP)

Always interesting to understand contrarian views. My positive confirmation bias is always very strong, so I genuinely make an effort to analyse other points of view. Always end up discounting them though.

 

[Uncle Festivus]

Re: OIL AGAIN!

My share portfolio will be a small fraction of its current value if $20 oil comes to bear, as I only hold energy shares (oh and $1k each of GMG and MIG, in case of a SPP)

Always interesting to understand contrarian views. My positive confirmation bias is always very strong, so I genuinely make an effort to analyse other points of view. Always end up discounting them though.

I'm not sure there is any overwhelming sentiment that oil is going to rise substantially any time soon, at least the global trade figures and consumption don't support that view. It all very much depends when or if consumers start to consume again? Energy will always be the dampener of any sustained economic revival, maybe before it even starts by speculative pre-emptive bullishness?

What is positive confirmation bias? What is the reasoning behind your bullish view and the discounting of bearish views?

 

[jonojpsg]

Re: OIL AGAIN!

I'm not sure there is any overwhelming sentiment that oil is going to rise substantially any time soon, at least the global trade figures and consumption don't support that view. It all very much depends when or if consumers start to consume again? Energy will always be the dampener of any sustained economic revival, maybe before it even starts by speculative pre-emptive bullishness?

What is positive confirmation bias? What is the reasoning behind your bullish view and the discounting of bearish views?

I'm starting to think I agree Uncle I was all set to ride the oil price back to $90-$100 but am thinking now that unless demand picks up that it will fall back somewhat. Probably can't see $20 given the underlying costs of production would make OPEC cut back supply significantly if price did head back under $50 again.

Oh well, just have to be patient and wait for signs of increasing demand - although stockpiles in US have been falling so...

 

[MRC & Co]

Re: OIL AGAIN!

CFTC apparently in the first of 3 meetings tonight, talking of their new report about banning some speculation (namely the carrying of too larger positions by Goldman Sachs and USO I believe).

The new report apparently states the report conducted last time (after the parabolic rise to 150 and the subsequent crash) was based upon mis-information. Whereas the old report stated speculators were not to blame, the new one states they are (according to rumour).

I thought I remembered WayneL arguing that they are not to blame, but can't remember the line of argument.

Anyone have any opinions on this? Being a new trader of oil, I really hope it does not place any kind of restriction on commodity speculation, as it would definately cause a fall in both volume and volatility IMO.

Thoughts?

 

[Trembling Hand]

Re: OIL AGAIN!

Any of you Texas tycoons get a runner on oil last night??

What was it 11%

 

[MRC & Co]

Re: OIL AGAIN!

Any of you Texas tycoons get a runner on oil last night??

What was it 11%

I didn't trade last night unfortunately

 

[Wysiwyg]

Re: OIL AGAIN!

December Crude up 9 bucks in 8 days to US$78 per barrel. There will come a day when 100/bbl will be the base. Humans up = oil supply down.

 

[jonojpsg]

Re: OIL AGAIN!

December Crude up 9 bucks in 8 days to US$78 per barrel. There will come a day when 100/bbl will be the base. Humans up = oil supply down.

Good call Wys! There is no doubt that we will look back in a couple of years and shake our heads in disbelief that oil was $40 a barrel, or even $80. Seriously, when you look at how ubiquitous the use of oil is and how intertwined with almost everything we do, it seems incredible that the majority stick their heads in the sand and say "no problems, we've got enough oil to last another 50 years at least"

With oil production peaking in 2005, it is ONLY the GFC and associated dip in demand that has prevented POO from staying well above $100. Assuming demand growth returns, which is inevitable IMO, oil will become THE commodity to be in over the next five-ten years.

How our society copes with loss of security of supply is another matter

 

[WilliamKong]

Re: OIL AGAIN!

I'm starting to think I agree Uncle I was all set to ride the oil price back to $90-$100 but am thinking now that unless demand picks up that it will fall back somewhat. Probably can't see $20 given the underlying costs of production would make OPEC cut back supply significantly if price did head back under $50 again.

Oh well, just have to be patient and wait for signs of increasing demand - although stockpiles in US have been falling so...

Yesterday Chinese Custom just published their monthly report, which stated that Chinese increased their monthly import of crude oil by 14%. This can be seen as an evidence that the demand is still there, and is likely to persist for sometime now.

 

[basilio]

Re: OIL AGAIN!

Have many forum members been following the recent discussions on the overstatement of world wide oil reserves by the International Energy Agency?

Has a couple of implications in terms

1) Tightening of oil supplies in the near future and pressure on prices
2) Pressure on all world economies as the energy base of our economies grinds downwards.

Global oil supply 'far worse than admitted
TERRY MACALISTER, LONDON
November 11, 2009

Oil price forecast to rise

THE world is much closer to running out of oil than official estimates admit, says a whistleblower at the International Energy Agency who claims it has been deliberately underplaying a looming shortage for fear of triggering panic buying.

The senior official claims the United States has played an influential role in encouraging the watchdog to underplay the rate of decline from existing oilfields while overplaying the chances of finding new reserves.

The allegations raise serious questions about the accuracy of the organisation's latest World Energy Outlook on oil demand and supply, to be published overnight.

The outlook is used by many governments to help guide their energy and climate change policies.

In particular, the allegations cast a shadow on the prediction in the last World Economic Outlook, believed to be repeated again this year, that oil production can be raised from its present level of 83 million barrels a day to 105 million.

External critics have frequently said this cannot be substantiated by firm evidence and that the world has already passed its peak in oil production. Now the ''peak oil'' theory is gaining support at the heart of the global energy establishment.

http://www.theage.com.au/world/global-oil-supply-far-worse-than-admitted-20091110-i7gu.html

Also came across a quite astute analysis of why the rising price of oil may result in less investment in oil and more in the financial markets.

Check it out.

A Gesture from the Invisible Hand
John Michael Greer,

The claim that market forces will inevitably take care of energy shortfalls due to peak oil is common enough these days. Unfortunately for such optimistic notions, there's reason to think that in an environment of economic contraction caused by geological limits to energy, market forces may well push money away from any investments that could help the situation

http://www.energybulletin.net/50678

 

[Smurf1976]

Re: OIL AGAIN!

Have many forum members been following the recent discussions on the overstatement of world wide oil reserves by the International Energy Agency?

Those who have followed the oil debate have for many years argued that official reserves are overstated, that conclusion being based on the fact that the numbers just don't stack up.

That the IEA is admitting to this does suggest that they know that problems are (1) unavoidable and (2) not far away since otherwise they have no real reason to admit something like this now.

 

[jonojpsg]

Re: OIL AGAIN!

With an annual decline in production of 5% from all existing production, which I believe is reasonable based on figures from IEA and other research, this equates to about 4m bopd decrease each year.

There is no way that new discoveries/production will be able to match this AND provide an extra 1-2m bopd each year to get to any stated target in the 100+mbopd range (IMO of course).

In which case, there is some serious .... going to hit the fan over the next few years as net importing countries face up to limited supply as well as a steadily, if not rapidly, increasing POO.

 

[Largesse]

Re: OIL AGAIN!

This may seem like an obvious question, but are we as Australian's net importers or exporters of Oil?

 

[Wysiwyg]

Re: OIL AGAIN!

This may seem like an obvious question, but are we as Australian's net importers or exporters of Oil?

Importers.