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21407 messages, Last post on Nov 27, 2009 at 5:35 PM
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Replying to: anthonyp (May 30, 2009 12:01 pm) 
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Replying to: ljflx (May 29, 2009 9:21 am) Also, after reading this stuff, you may be right and oil could go back down to the low to mid 40's. But even if it does not get down to that level, I doubt it will get much higher than where it is right now. I hope all the posters on this forum take a few minutes and read these articles. It is always good to look back at history.
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Replying to: cyclone4 (May 30, 2009 6:13 pm) It's almost comical reading some of them. I have others I saved somewhere. All along big oil was saying there was no reason for the run-up and they were saying that in Q4 2007 before the meteoric rise that came after that. A lot of folks blame big oil but that run-up was all caused by Wall Street hedge funds buying futures on high leverage and it's repeating to a much lesser extent again. The funniest thing was reading how the Wall Street analysts were claiming that the oil companies were stating the run-up was irrational and the price had to fall, simply to give them cover from public outrage. That's like the arsonist starting the fire and blaming the firemen. The second funniest thing was reading about the oil shortage that supposedly was about to happen when in reality we were looking at the biggest oil glut in 20 years right around the corner. I was very serious the other day. A guy I know in the industry said whenever you hear Nigeria mentioned that is Wall Street setting up a sucker rally. Think about it. Did you even hear a whisper about Nigeria in the last 6 months? Once they wanted oil to run-up I heard Nigeria story after Nigeria story day after day. Meanwhile Nigeria pumps a third of the oil it did 5 years ago and we're swimming in an oil glut. The draw on oil the last two weeks was refiners ramping up now that gas is high enough. Refiners got killed last year because they never were able to pass on the massive oil prices to the consumer at the pump. They like oil right where it is now for their biggest profits. Frankly - a $50-$60 price of oil is probably a win across the board. I'd rather see oil be stable in that range or even in the low 60's. It's the right balance for exploration, profits for the companies including refiners plus it's not a bad price for the consumer. But on a pure fundamental basis oil is again way overpriced and ultimately there is no denying the fundamentals. That's why I can see oil tanking as far as I do. It remains my belief that an economic rebound will require a lot less oil than the economy of 2-3 years ago required and that economy had overpriced and over-speculated $70-75 oil.
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Replying to: ljflx (May 30, 2009 7:11 pm) New Boom: Look Out Below! Like all past booms, here is a comment that makes my eyes open wider! For oil, the fact that futures prices are higher than spot is also helping to draw in speculators. Regards, OW |
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Replying to: ljflx (May 30, 2009 7:11 pm) To the point, and as a matter of fact, gasoline prices are already high again... Around $3/gallon for premium in many areas. Not quite the $4 we saw, but closer to that $4 than the "buck & change" we saw recently. Charlie is right when he posted that I'd like to see lower gas prices... but I'm afraid those low prices are already history. You can have your opinion, of course, but I strongly maintain that higher gas prices are already upon us, and will go higher, on average... not lower. TM
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Replying to: tagman (May 31, 2009 9:19 am) Here is a link reflecting much of why Len is bearish. I'm not saying that oil will be cheap forever but it should reflect the economy which I doubt will be in a V-shaped recovery. AFAIC, the current market is showing some foolish behavior. History Repeats Itself Regards, OW
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Replying to: circlew (May 31, 2009 11:01 am) Love your posts, as usual... but, that article has flaws, and many of the comments just after it suggest why. I think that it is interesting that the price of gasoline is so high, and that the demand forecasts for 2009 indicate a decline in demand for oil due to the economy. Big oil will adjust supply to balance with the demand, and the demand will start to grow in a relatively short time. I say this because it won't be long before we will be half way through this year, and I think it is reasonable to expect the recession to slowly start to turn around next year, if not later this year... some say it already has, but I'm looking for better numbers. IOW, I expect demand will increase in the not-too-distant future, and supply will have its limitations, as the economy improves. It won't take Wall Street meddling to run up the price of oil this time. But, if they do meddle, the pressure will be upwards. On top of that, if you take the world political scene and put it into the picture, that could point prices in either direction, but I personally believe upwards at this time in history, given all the potential mess in the Middle East. A much longer look into the future points to less demand for fossil fuels, but before that happens, the demand will increase. Moving forward, the giant oil companies would be stupid at this point to allow too much supply of oil. We are in a changing world. Gasoline prices are high even right now, and I am not convinced by anyone here, including Len, that they are going to go down. As the economy improves, I think the price of gasoline will go even higher. Don't you expect the economy to improve over time. Don't you expect the global demand for oil to increase over time? Independence from oil is still a ways off, I'm afraid. TM
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Replying to: bmlexus (May 31, 2009 4:01 pm) I honestly hoped for something better. Thanks for posting that reality check. TM
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