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Oil to drop sharply?
#61
Adam and Eve didn't have belly buttons.
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#62
WmLambert Wrote:Adam and Eve didn't have belly buttons.

Did you run that by your brother first? S6
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All men are frauds. The only difference between them is that some admit it. I myself deny it.
H. L. Mencken
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#63
Gas down to $1.76 retail in parts of Missouri.
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#64
I wish I could say the same here in NC, but it is definately coming down.

I wonder what it is like in Anon and Grizzly ville?

See it here.
___________________________________________________________________________________________________
All men are frauds. The only difference between them is that some admit it. I myself deny it.
H. L. Mencken
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#65
Interesting article about this subject from BusinessWeek.
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How Hot Money Inflames Oil Prices
Hedge funds and other investors may have helped push oil prices up. Now, they're helping push them down—and fast

By Christopher Palmeri
BusinessWeek Online

There's been an ongoing debate since energy prices began their steep rise four years ago: Was the money pouring into the oil patch from mutual funds, traders, hedge funds, and other financial players pushing up the prices that consumers pay to heat their homes and fill their gas tanks? In other words, was hot money behind the sharp rise in energy prices?

Well, now the hot money is moving out of energy, and it seems clear that it's adding just as much volatility to prices as they move down as when they were moving up. Without any major changes in supply or demand, the price of oil has been tumbling, dropping below $59 on Oct. 3. That's 25% off the peak of $78 in July. Natural gas prices have fallen even more sharply, to $5.80 per million Btus from $15 last December, a drop that likely precipitated the $6 billion blowup at hedge fund Amaranth Advisors.

DOWNWARD TUMBLE. Behind the price declines is a sharp contraction in the amount of money being invested in energy assets. The amount of new money flowing into the 48 natural resources mutual funds followed by Morningstar slowed to just $12 million in August, down from $1.6 billion in the same month in 2005. The PIMCO Commodity Real Asset fund, which saw its assets swell to $12 billion since its startup in 2002, has taken in just $100 million this year. "There's been a big money exodus," says Peter Fusaro, founder of the Energy Hedge Fund Center, an energy trading information site that tracks hedge funds. "Many investors took profits and are sitting on their powder." (Figures for September money flows are not yet available.)
Rest of the article at: http://biz.yahoo.com/special/allbiz101106_article1.html
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#66
Don't sell that SUV just yet. Oil, at a recent $66.50 a barrel, will fall to $45 by mid-2007 and could dip briefly into the 20s in 2008. Sometime next year you are going to see a $1.95 price on a gas pump.

So says Michael C. Lynch, 51, president of Strategic Energy & Economic Research in Amherst, Mass. He swears he hasn't been inhaling fumes. His reasoning: New supply, coming online from all corners of the world, is more than ample to satisfy growth in demand and sufficient even to withstand an embargo against Iran, which produces 3.75 million barrels of oil a day. Lynch argues that the threat of disruptions--nuclear brinkmanship, war, terrorism, hurricanes, pipeline corrosion--has larded oil prices with a $20-a-barrel risk premium. As these perils recede, oil prices will fall.
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Government is necessary because people left unchecked will do evil.

The government is composed of people left unchecked


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#67
Something to remember when discussing oil is it is a commodity. ALL commodity prices are receding to various degrees.

There is a common cause,so someone point out what it is.

I say the only cause could be global economic demand is heading south.
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#68
Like it is indicated in the MV's message, all countries increased their search for oil after large price increases. I know for a fact that Turkey found some oil reserves in the Black Sea, Tracia, and South East regions of Turkey, those are not comparable to the oil reserves of the big oil producing countries, but it helps to cut down on dependancy from outside sources.

If every country works on cutting down on their dependancy of oil from outside sources, the prices of oil has only one way to go and it is down.
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#69
Kamil,

Anyone who thinks oil can be found and produced rapidly doesn't understand anything about the industry.

Current finds have no input on current prices. There are reasons for this. The oil in many geographic areas will never be properly exploited due to geo politics,conflicts,etc. The physical time to delineate the field,test the field and then turn the field into a massive producer,this takes huge investments of cash and time.

A perfect example is all the oil of the Caspian Sea region. Back in the early 1990s that oil would be a boon,it has just begun to be retailed via the Ceyhan,Turkey header last year.
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#70
Kamil Wrote:Like it is indicated in the MV's message, all countries increased their search for oil after large price increases. I know for a fact that Turkey found some oil reserves in the Black Sea, Tracia, and South East regions of Turkey, those are not comparable to the oil reserves of the big oil producing countries, but it helps to cut down on dependancy from outside sources.

If every country works on cutting down on their dependancy of oil from outside sources, the prices of oil has only one way to go and it is down.

This is how the Supply/Demand equation will Always work, provided the State keep it's nose out of things, and simply allow the marked to work properly. Keeping Collectivists and Do-Gooders out is a Necessity, or they will just screw things up and make it worse.




Also, I stated somewhere else, that Steve Forbes has been saying the very same thing for over a year now. I guess he was correct, right?
___________________________________________________________________________________________________
All men are frauds. The only difference between them is that some admit it. I myself deny it.
H. L. Mencken
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#71
John,

Yes,but the current price collapse has didly to do with enhanced research efforts. There hasn't been enough time to change supply and won't be for many years.

The futures market buys and sells tremendous quantities of crude oil TODAY for consumption in a very short timeframe.

Long term higher prices remedy themselves,but not in 6 months.
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#72
Palladin Wrote:John,

Yes,but the current price collapse has didly to do with enhanced research efforts. There hasn't been enough time to change supply and won't be for many years.

The futures market buys and sells tremendous quantities of crude oil TODAY for consumption in a very short timeframe.

Long term higher prices remedy themselves,but not in 6 months.

Patrick, You ARE aware that oil prices have been artificially high for over the last 18 months, due to the preception that we are in trouble, correct? Now, if perception can determine short term prices negatively, then why can it not do the same thing positively?

Also, check the online availability of oil as it stands right now. Taking that into consideration, it is natural to see why I last fillup my van in Columbis SC yesterday for $1.97/gallon. And it will slowly get better.

Further, as more sources become available, look for things to get better over time. This happens about every 25 years, and we go through through the process all over again. fortunately, Bush's advisors are smart enough to advise him not to act as we did in the 70s. Had we overreacted, we would be going through the same thing we did then. In this, I give credit where it is due.
___________________________________________________________________________________________________
All men are frauds. The only difference between them is that some admit it. I myself deny it.
H. L. Mencken
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#73
John,

ALL commodity prices are collapsing. You cannot explain the falloff of one while ignoring the cause for all of them to collapse. Fear isn't why lead has skyrocketted in the last 2 years,fear has nothing to do with copper supplies.

Fear has to do with oil futures prices only and there is more LOGICAL reason right now to fear it's massive disruption that there has been in the 20th century. Fear quotient has increased,not decreased in the last 2 months.
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#74
Palladin Wrote:John,

ALL commodity prices are collapsing. You cannot explain the falloff of one while ignoring the cause for all of them to collapse. Fear isn't why lead has skyrocketted in the last 2 years,fear has nothing to do with copper supplies.

Fear has to do with oil futures prices only and there is more LOGICAL reason right now to fear it's massive disruption that there has been in the 20th century. Fear quotient has increased,not decreased in the last 2 months.

Patrick, I think that you are pegging this on oil. But keep in mind that the only commodity that is Really capable of doing as you worry, and not be all that dependent upon supply, is Gold. It is the Numerary, as Jude Wanniski constantly stated. and in fact, gold has been over sold, to the point that it is grossly overvalued. All the advertisements over the past several years, coupled with deflation in which gold was then priced below $275/oz, the market was ripe for exploitation.

If you own any gold, I would suggest that you get rid of it, unless you just love to look at the colour. Now that gold is coming back in line with the Dollar/Gold equation, all other commodities are following suit. Only a scarcity of a particular commodity can cause it to go up as with oil. But your attempt to peg oil to the reason for the dropping of other commodities, is misplaced. Look to gold for that explanation.
___________________________________________________________________________________________________
All men are frauds. The only difference between them is that some admit it. I myself deny it.
H. L. Mencken
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#75
John,

You still must explain why all the commodities are receding in price together. I say global economic activity is slowing,what other cause could there be?

They all are down. Copper,lead,zinc,oil,gold,pig bellies,you name it.

There's more to this than just oil.

I'm not sure about gold as the instability of the world and weakness exhibited by the USA might cause some to run to gold and not to the dollar. Let there be a few terror blasts here for example.
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#76
Palladin Wrote:John,

You still must explain why all the commodities are receding in price together. I say global economic activity is slowing,what other cause could there be?

They all are down. Copper,lead,zinc,oil,gold,pig bellies,you name it.

There's more to this than just oil.

I'm not sure about gold as the instability of the world and weakness exhibited by the USA might cause some to run to gold and not to the dollar. Let there be a few terror blasts here for example.

As I stated the price of gold is going down as the speculation bubble is bursting. This weakening will naturally stregthen the value of the dollar, thus making everything cheaper, including commodities. YOu will continue to see this happen. If you combine the high inventory of oil, and the drop in the price of gold, you are going to see a complete dropoff of the inflationary cycle.
___________________________________________________________________________________________________
All men are frauds. The only difference between them is that some admit it. I myself deny it.
H. L. Mencken
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#77
OK,I didn't see the dollar value as having increased this much. Question 2,why is it?

What makes you more confident about the USA and economy now than 6 weeks ago if you're a Euro or Asian?
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#78
Palladin Wrote:OK,I didn't see the dollar value as having increased this much. Question 2,why is it?

As I stated, the value of gold is about to take a dive, which means that the value of the Dollar will corresponedently move up, by default.

Quote:What makes you more confident about the USA and economy now than 6 weeks ago if you're a Euro or Asian?

Pardon?
___________________________________________________________________________________________________
All men are frauds. The only difference between them is that some admit it. I myself deny it.
H. L. Mencken
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