Hoarding is exactly what the government is doing right now by filling the SPR, and frankly it's the best thing that could happen. It drives prices up. High prices encourage demand destruction. They also finance new well development. The hoarded oil gives us a buffer to fall back on once shortages become more prevalent. High prices are what we need in order to adapt to what's coming, and the sooner they happen, the better.
Posted: Fri Feb 15, 2008 5:03 am Post subject: Re: The 2008 PO.com Oil Price Challenge
Freddy, how do you give values to each of the variables?
Given the decline in the dollar, which is not going to reverse any time soon, a realistic floor must be $60+ irrespective of the possibility of a build in spare capacity to 2002 levels wouldn't you agree?
Joined: Jan 14, 2008 Posts: 321 Location: The Yukon
Posted: Fri Feb 15, 2008 11:24 am Post subject: Re: The 2008 PO.com Oil Price Challenge
mkwin wrote:
Freddy, how do you give values to each of the variables?
Given the decline in the dollar, which is not going to reverse any time soon, a realistic floor must be $60+ irrespective of the possibility of a build in spare capacity to 2002 levels wouldn't you agree?
Except for the fear premiums, the components are based on associated data. This is reflected for example in currency debasement. Just based on inventory & surplus capacity status, the base contract oil price is $54. But when we add over three years of currency devaluation as experienced by the usa trading partners, the base is raised twenty bucks to $74. That would normally be the base, except for the extraordinary situation of obscene margin at present. Calculated at $15, it is expendable and thus would reduce the base to the $59 vicinity ... just as u presumed!! _________________ www.TrendLines.ca/scenarios.htm Home of the Real Peak Date ... set by geologists (not pundits)
Posted: Sat Feb 16, 2008 8:22 am Post subject: Re: The 2008 PO.com Oil Price Challenge
Quote:
It would appear the days of sub $50 (last seen 365 days ago) have passed into posterity.
This is a really interesting graph, and I followed it to your website to some of your other info.
I think this is really interesting, trying to break down the oil price to individual constituents. Kind of hard to estimate things like "lack of surplus capacity" premium, as distinguishable from "fear" and "inventory squeeze" so each of these things is arguable, but the interesting thing is the gradual increase in production cost (the green line at the bottom). I believe shortonoil is working on a project to the effect that this line will eventually become non-linear, as the older fields phase out and the new fields come in, and at that point TSHTF because EROEI for the incremental barrel will go negative.
Also the currency effect is quite dramatic. I had not calculated it lately, but you are saying maybe $20 per barrel, which is 20% of the price at this point.
Posted: Thu Feb 21, 2008 7:43 pm Post subject: Re: The 2008 PO.com Oil Price Challenge--New Leader
That is just barely. It will be interesting to follow the development throughout the year. I guessed the oilprice wouldnt increase much from the level in nov/des last year. That based on possibly relatively high levels of new oil coming online this year and next year if the megaproject site is thrustworty. However the oilprice has been surpricingly strong so far this year in spite of the subprime crisis in the US. We have to wait and see.
Posted: Thu Mar 06, 2008 9:35 am Post subject: Re: The 2008 PO.com Oil Price Challenge--2-26 data
Quote:
Henry Groppe 85
Yergin/CERA 90
Citigroup 90
US-EIA 96
Si Kannan from Kotak Commodities 100
Brian Hicks, Global Resources 100
Steven Leeb, Leeb Capital Mgt 100
Leo Drollas CGES 100
Monday Morning (US) 100
Goldman Sachs 105
Anand Rathi Commodities’ Kishore Narne 108
John Kilduff CNBC/-MF Global- 110
Mark Johnson, OMFinancial 110
Mohammad-Ali Khatibi, Iran Oil Co. 110
Mark Waggoner Excel Futures 120
Johannes Benigni,PVM Oil 120
Jim Cramer CNBC 125
Eric Bolling, Nymex Trader 130
Sean Brodrick, Market Oracle 150
Saxo Bank 175
Here are the predictions of the "experts" that we captured earlier. At a price of 106, we are at about the median of the 22 forecasts. The average was 111.
Joined: Mar 07, 2007 Posts: 282 Location: Holland, United Kingdom (of the seven Netherlands)
Posted: Thu Mar 06, 2008 2:47 pm Post subject: Re: The 2008 PO.com Oil Price Challenge
I don't believe oil will set another record low for this year. That means that in my view the low ranks have been decided.
If I order the current top 10 by low difference I get:
I don't have a chance any more to beat SteinarN unless the oilprice gets a new recordlow. I'm too far behind based on the current recordlow. I'm 8.28 behind there. If I guessed the exact high and close, that still won't be enough to win (7.4 difference in the best case).
It seems like the pessimists have been making the best low differential predictions. That is not a good sign. The best predictor (sjn) predicts $ 752/barrel...
Posted: Mon Mar 10, 2008 2:07 pm Post subject: Re: The 2008 PO.com Oil Price Challenge
hmm... Oil at $150 by the ending of this year? $200? Why not? a recession? maybe this Price Challenge ends with an inflation vrs deflation challenge... _________________ anagami.net
Posted: Mon Mar 10, 2008 3:06 pm Post subject: Re: The 2008 PO.com Oil Price Challenge
It really is hard to judge the affect of the dollar collapse. Almost every commodity has taken off since August last year.
If there is a big financial collapse, many funds could be forced to liquidate commodity assets in order to cover margin calls on other assets so the price may collapse yet for assets as diverse as copper, gold, silver, platinum, wheat, soybeans, cocoa, grain and of course oil.
The rise in the price of oil before Christmas was justified on the basis of the stock draw downs and potential conflict with Iran both of which have subsided, this last rally is possibly a bull trap in a wider commodities bubble. Who knows how far it will go.
Posted: Wed Mar 12, 2008 9:17 pm Post subject: Re: The 2008 PO.com Oil Price Challenge
zensui wrote:
hmm... Oil at $150 by the ending of this year? $200? Why not? a recession? maybe this Price Challenge ends with an inflation vrs deflation challenge...
I think so. Hence my prediction. The biggest problem facing the dollar is the loss of faith internationally (well deserved, with it now increasingly backed by mortgage securities), with oil traded internationally in dollars, I can only see the price of oil rising irrespective of the fundamentals. Of course everybody probably knows that my view on the oil fundamentals is the supply situation is worse than the EIA and IEA reports, and there is an effort to spin the data...
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