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NevadaGhosts
Intermediate Crude
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Joined: Aug 20, 2004
Posts: 752
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 Posted: Wed Jan 25, 2006 10:51 pm Post subject: Oil prices dropping? |
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Oil prices tumble despite worries
| Quote: | Oil prices fell by more than $1 a barrel Tuesday despite lingering concerns about supplies in view of Iran's nuclear ambitions and militant attacks in Nigeria.
Also Tuesday, Energy Secretary Sam Bodman said U.S. gasoline and diesel fuel supplies should be adequate to meet spring demand. He cited a growing expectation that OPEC will maintain current crude oil production levels when the cartel meets next week. |
story here
Oil falls sharply on US fuel stocks data
| Quote: | Oil fell sharply on Wednesday on a larger-than-expected rise in U.S. gasoline and distillate stocks, overshadowing supply concerns in Iran, Russia and Nigeria.
U.S. crude futures fell 96 cents to $66.10 a barrel, while London Brent crude shed 79 cents to $64.55 a barrel.
U.S. government data showed domestic gasoline supplies up a surprising 3.2 million barrels last week, beating expectations for a 1.3 million build.
"The gasoline build is substantial and it confirms the price weakness we've been seeing over the last several days," said Tim Evans of IFR Energy Services. |
story here
Why are oil prices dropping? I just really dont understand any of this. Things are looking worse and worse with Nigeria, Iran, Venezeula and and the Gulf Coast region (about 20% still offline), and the price of oil keeps dropping? If anything, the price should be much higher due to the reality of the situation. Trusting Saudi Arabia to make up any production shortfalls is crazy. They have not been able to substantially increase their production for quite some time now, despite all of their past promises. Its obvious they are maxed out on production. We really are heading for a cliff this summer (in my opinion).
Last edited by NevadaGhosts on Thu Jan 26, 2006 12:40 am; edited 1 time in total |
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Russian_Cowboy
Heavy Crude
Joined: Feb 16, 2005
Posts: 251
Location: Siberia of Canada
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| Posted: Wed Jan 25, 2006 11:30 pm Post subject: Re: Why are oil prices STILL dropping? |
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| Maybe this is because a new large oilfield has SUPPOSEDLY just been discovered in Russia in the Caspian Sea? |
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Jellric
Heavy Crude
Joined: Oct 11, 2005
Posts: 257
Location: Southern USA
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| Posted: Wed Jan 25, 2006 11:53 pm Post subject: Re: Why are oil prices STILL dropping? |
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First of all, I don't personally consider a one day drop of 96 cents to be a "sharp fall". That sounds like wishful thinking/media spin to me. And oil is not really dropping. It's 4$ off its all-time high for goodness sakes!
And there was indeed a price increase recently up to about 69$ after the Iran confrontation heated up and the Nigerian situation entered the news. But prices don't move in a straight line- they go up and down.
It's best to focus on the long term trend and that is clearly up for oil.
My oil company stock options have almost doubled since I bought them a month ago. Believe me- the price of oil is quite high.
Now if you see it fall below 60$/barrel then you can consider that a true decline. To me, 60$ is the floor for oil for the forseeable future. |
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Grimnir
Intermediate Crude
Joined: Oct 04, 2004
Posts: 901
Location: USA
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| Posted: Thu Jan 26, 2006 3:57 am Post subject: Re: Oil prices dropping? |
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| It's possible that the current price already takes all the political uncertainty into account. I think the raw supply/demand situation is still secure enough that oil would be a good deal cheaper if everyone were confident that nothing was going to get blown up. |
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Dukat_Reloaded
Light Sweet Crude
Joined: Jul 31, 2005
Posts: 1009
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| Posted: Thu Jan 26, 2006 4:04 am Post subject: Re: Oil prices dropping? |
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Gone up $10 in one month and drops $1 people are claiming that oil prices are dropping, comon. Look at silver
Everything is going up, and it will keep going up. |
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Novus
Light Sweet Crude
Joined: Jun 21, 2005
Posts: 1741
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| Posted: Thu Jan 26, 2006 6:52 am Post subject: Re: Why are oil prices STILL dropping? |
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| Russian_Cowboy wrote: | | Maybe this is because a new large oilfield has SUPPOSEDLY just been discovered in Russia in the Caspian Sea? |
Lukoil discovers 600 million barrels and it makes major healines. On the same day Repsol decreases its proven reserves by over 1200 million but the story is buried. Private US oil reserves grow by 50 million barrels while the strategic oil reserve shrinks by 72 million barrels. Which number does the media focus on?
That is why oil prices are falling. Market prices are basically based on expectations and most of the world believes peak oil is 30 years away if believe in Peak Oil at all. The Markets are focusing on Iran right now. Iran is not a long term danger to oil prices, geology is. |
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elroy
Heavy Crude
Joined: Sep 25, 2005
Posts: 350
Location: Netherlands
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| Posted: Thu Jan 26, 2006 9:01 am Post subject: Re: Why are oil prices STILL dropping? |
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| Novus wrote: | | Russian_Cowboy wrote: | | Maybe this is because a new large oilfield has SUPPOSEDLY just been discovered in Russia in the Caspian Sea? |
Lukoil discovers 600 million barrels and it makes major healines. On the same day Repsol decreases its proven reserves by over 1200 million but the story is buried. Private US oil reserves grow by 50 million barrels while the strategic oil reserve shrinks by 72 million barrels. Which number does the media focus on? |
Do you have any news links about those ?
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rockdoc123
Light Sweet Crude
Joined: May 16, 2005
Posts: 1708
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| Posted: Thu Jan 26, 2006 9:08 am Post subject: Re: Oil prices dropping? |
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| Quote: | | On the same day Repsol decreases its proven reserves by over 1200 million but the story is buried |
don't make this out to be something it is not. The amount of oil that is in the pools they were producing in the countries in question did not suddenly get reduced...what declined was Repsol's share of that oil due to changed fiscal terms. Again you need to understand what net proven reserves or P1 actually means.
This is bad news for Repsol and any other oil company working in these countries (as well as their shareholders) but a non-event in terms of peak oil.
I swear that if there was a second coming of Christ some people on this board would find a way of relating it to either Peak Oil or Global Warming....on a good day maybe both.  |
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aahala
Intermediate Crude
Joined: Feb 03, 2005
Posts: 954
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| Posted: Thu Jan 26, 2006 12:02 pm Post subject: Re: Why are oil prices STILL dropping? |
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| Novus wrote: |
Lukoil discovers 600 million barrels and it makes major healines. On the same day Repsol decreases its proven reserves by over 1200 million but the story is buried. Private US oil reserves grow by 50 million barrels while the strategic oil reserve shrinks by 72 million barrels. Which number does the media focus on?
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That 72 million barrel drop, were you referring to the US SPR?
If so, I too would like to know where you got that figure, it doesn't
seem to be consistent with the numbers on their website:
http://www.fe.doe.gov/programs/reserves/spr/spr-facts.html
Their site shows a 17 million drop from it's peak which occurred
shortly before Katrina, about 700 then, 683 now. |
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Leanan
News Editor
Joined: May 20, 2004
Posts: 4575
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| Posted: Thu Jan 26, 2006 12:11 pm Post subject: Re: Oil prices dropping? |
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| I think it's just really volatile. It was back up again last time I checked. Supposedly on worries about Nigeria and Iran. |
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NevadaGhosts
Intermediate Crude
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Joined: Aug 20, 2004
Posts: 752
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| Posted: Thu Jan 26, 2006 12:19 pm Post subject: Re: Oil prices dropping? |
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| Leanan wrote: | | I think it's just really volatile. It was back up again last time I checked. Supposedly on worries about Nigeria and Iran. |
Yeah, you're probably right. Back one step, forward 2 steps. |
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Longsword
Heavy Crude
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Joined: Oct 23, 2005
Posts: 142
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| Posted: Thu Jan 26, 2006 1:16 pm Post subject: Re: Oil prices dropping? |
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Just to echo others, we really need to look at this long term.
The world supply is tight, so even small disturbance or hint at it causes prices to jump a lot. If the situation seems to calm down for a little while the price goes down a bit and the news celebrate the ridiculously low oil prices that have crashed to 68$ from 69$.
Still the current trend is upwards even if we discount politics. There will be downturns, though "prices dropping sharply" is a distasteful headline considering how high the price is.
I still think we may well see one last big drop in oil prices if Saudi-Arabia somehow manages to squueze it production upwards for a little while. But in the long term I don't believe in any reversal of the price trend.
For me whether Peak is 0 or 30 years away is not the biggest issue -the issue is the political unwillingness to even consider that there could be any negative impact if we continue down the fossil fuel path.
Every year we hear talk from politicians about using renewables and alternatives, and every year we rely more and more on oil and gas. |
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