Like the illusion of Wall Street, with its vast and powerful investment banks, now shuttered, China too is an illusion perpetuated by the Globalists that gave us the 15,000 mile Caesar salad, poisoned cat food and lead based paint on babies' pacifiers. Like the illusion that money would come from thin air to always push housing prices higher, China has spent a generation pursuing its illusion. Pursuing an unattainable dream to be like the West, while 6000 years of its carefully shepherded top soil blows into the sea.
Posted: Fri Aug 15, 2008 3:11 pm Post subject: Re: $111 oil?
joeltrout wrote:
Besides physical preps what are you doing to profit from that. It seems like a huge opportunity if you really believe that.
Profit is becoming relative. For now not stepping into the trap is enough because most people are losing money. If an opportunity presents itself later, we will see. People do too many stupid things in pursuit of returns and in the present environment I am not inclined to join them.
Here is how I see it - most people will be able to ignore the ceiling imposed by eventually declining oil production capacity because the floor will give way first. The economic floor that is - it is giving way - we are sliding towards global recession now. In this crisis, demand will be destroyed, efficiencies will be improved, and those not impoverished along the way will assume they are OK forevermore. There is lots of fat to cut. We will use less oil and nominally it should be much cheaper than it has been this summer. Supply will be adequate. Affordability is something else though. It will not necessarily feel cheap, and by historical standards it certainly will not be. We are still talking triple or quadruple the price everyone took for granted a few years ago, because the business is more energy intensive and costs are higher.
But that is going to be a fairly brief period in the great scheme of things because the challenges posed by declining provinces like the North Sea and key exporters like Mexico will mature. We will see competition for remaining export flows once they decline to whatever our economies will be demanding at that point. Then all the things we talk about happening in the future will materialise. But in all likelihood, there will have been an interval of some years where peak oil has been on the back burner if not the subject of outright ridicule, and this price action declared to have been the bubble that indeed it may well have been.
I am sure by then I will have figured out a way to fill my boots, or be in the one percent that does not lose its ass, which as far as I am concerned, amounts to the same thing. Failing that I will have the luxury of not caring all that much. Something for the hundred mile commuters out there to work towards. _________________ Volatility. When life isn't exciting enough.
Joined: May 30, 2008 Posts: 297 Location: On the highway, or the water somewhere!
Posted: Fri Aug 15, 2008 4:26 pm Post subject: Re: $111 oil?
Ferretlover wrote:
Just because a lot of fingers are being poked into the holes of the dike, doesn't mean the dike is not on track to completely collapse.
clapping sounds
Ferretlover wrote:
No matter what anybody says, oil is a finite resource and it is still being consumed at an amazing pace by the entire planet. Patience, grasshopper.
Cheering, foot stomping, screams of Yes! Yes! Yes! You got it! _________________ Courtesy and Courage, Sincerity and Self-control, Honor and Loyalty...a Code to Live By!
Where is my wooden pitchfork and torch anyway? I may need them for a visit to the castle soon!
Posted: Fri Aug 15, 2008 4:34 pm Post subject: Re: $111 oil?
gnm wrote:
Obviously its because of the massive new supplies being found. Or the huge increases in production... Rolling Eyes/sarcasm
World spare capacity is exactly what it was in 2004 - Zero (if you discount the Saudi road tar that no one can use).
Quote:
What I don't get is how the dollar is managing to gain so much. Inexplicable.
It’s called massive support from central banks that can’t afford to lose their investments in $. That won’t last much longer with the entire economy of the world now declining!
Joined: May 30, 2008 Posts: 297 Location: On the highway, or the water somewhere!
Posted: Fri Aug 15, 2008 4:43 pm Post subject: Re: $111 oil?
AirlinePilot wrote:
I think folks are forgetting we've been here before. The only difference is the swings are larger due to the level of the price. Do not pay attention to the man behind the curtain.
Clapping
<snipped>
AirlinePilot wrote:
As others have pointed out where is the commensurate demand destruction?
Parked airplanes at ????gallons an hour. ( What percentage of old fuel burners have been put out of service this quarter?)
Parked trucks at 18 percent drop ( year to year) fuel use at T A truck stops as I posted in another thread reported by TCA in heavy duty trucking.)
How many billion fewer miles driven this year? ( another thread here.)
How many jobs lost? How many homes lost? How much retail volume lost? Demand destruction is behind that curtain just waiting to show itself in the statistics.
AirlinePilot wrote:
Where is the huge increase in supply?
While there is as yet no huge increase in supply of crude, The will to divert investment into alternatives on a massive scale is building, and the will to conserve is also. The drill here, drill now mantra is (no matter how much we all may know is only at best a band aid,) working on the American public.
AirlinePilot wrote:
Without these, the price moves are not warranted and the only thing you can bet on is that wild swings, both ways will continue. Now If oil prices can stay lower over the longer haul, thats when to start paying attention to why.
I agree but those mounting pressures of will to find a FIX without really understanding HOW will lead to band-aids that do work for a while.. swings might in fact become undulations lasting years at a time.
AirlinePilot wrote:
Right now the fools rushing in to say "All is well" are the real crazies.
Balloons falling cheering stamping crowds....
AirlinePilot wrote:
Nothing fundamentally has changed over the short term,and as most of us tend to agree here, the longer term shows little promise of turning the current paradigm of consumption around. Patience is the watchword.
Yes something has changed, the economic model we entered the summer with is definitely broken, watch the falling economy ( and you will see it!)
Just my uninformed non macroeconomic opinion! LOL I cant afford to gamble on the future, I have too many grandchildren who need me to prepare for it instead! _________________ Courtesy and Courage, Sincerity and Self-control, Honor and Loyalty...a Code to Live By!
Where is my wooden pitchfork and torch anyway? I may need them for a visit to the castle soon!
Posted: Fri Aug 15, 2008 8:11 pm Post subject: Re: $111 oil?
PeakingAroundtheCorner wrote:
Are we completely discredited now?
Yes. The main problem with peak oiler thinking is a failure to understand the demand side. Peak oilers like to think of oil as oxygen, but it's really more like cigarettes -- a bad habit, hard to quit, but not really necessary.
Quote:
Almost everything I've read here in the past months is now being smashed. How much money have you lost in this process?
A lot of dumb schleps wandered in here in the spring and summer, bought into the commodity bubble at its peak, and got reamed. The "experts" in this forum should be taken out back and tarred and feathered. _________________ Thinking outside the petri dish.
First Global OIL AT $30-$50 A BARREL? We don't know about you, but this wouldn't surprise us at all. Anyone got a subscription?)
It's here. Some people have no respect for pay walls.
Others seem to have no respect for geology, like the author of the article:
Quote:
The bull case for oil rested on insatiable supply from China and India, and dwindling reserves. Both are patently wrong. China and India, combined, simply can't make up for consumption slowdowns from the rest of the world, especially the U.S., Eurozone and Japan. And there is plenty of anecdotal evidence to suggest that even the Chinese demand is exaggerated because China has overbought for the Olympics. The world has fairly comfortable reserves. And there is frenetic discovery exploration in Russia, Brazil, India, Iran and elsewhere. So, it's a fairly easy case to make that the world will be awash in oil in a few years from now, relative to demand.
Thanks for the link.
If you trade stocks, you probably read everyone else's opinions. I'm running into variants of this opinion all over the place. _________________ "May you live in interesting times"
Posted: Fri Aug 15, 2008 8:51 pm Post subject: Re: $111 oil?
I started haunting this place in May. I went through all the phases. No, I did not invest. I did sell. I am debt free, except for the evil house payment. What needs to stop is the crying wolf. Four or five mega-doomers around here are causing a lot of trouble. Kinda like when we were in school, in a class of a hundred, it only takes one idiot to ruin it for the rest. We have absolutely no idea how much oil is left. None. In these threads I have seen a plethera of charts and diagrams. Very little agreement can be found, among the believers! That doesn't bode well for the skeptic. All we know is that oil is finite, and we are not prepared for peak oil, whenever it happens. One fact you can count on though, the human race will survive. Always have. We've been through worse. A lot worse. Don't get me wrong, I am one of those who want PO to happen. Yes, that's right. Bring it on. I am completely disgusted by the fat, bloated, sweat pants wearing, wal-mart shopping, suv driving bottom dwellers in America. I am done with porked out, bloated, loud mouthed wenchbags hollering at their obese piglets in shopping lines. I long for an era where there are more good looking women than fat, nasty and smelly. Let the die off begin. Thin the herd. I will not step foot in a Golden Corral because the absolute disgust I feel by the sows feeding at the troughs. The day when grotesque, lard sucking good ol' boys in their oily rotted out pick-ups with gun racks and rebel flags are gone is a day I will praise peak oil. And if I don't survive, oh well. The tragedy in these days of an oil addicted world is not in dying, it's in living. I'm done now. _________________ We are so screwed.
Posted: Fri Aug 15, 2008 9:26 pm Post subject: Re: $111 oil?
What is the price of a commodity when it becomes strategic? World events move fast when supply and demand are closely balanced. Commodities also have seasonal patterns, and sometimes in a political season even oil companies take hits for "the team". Hurricanes, wars, insurgent attacks, and OPEC meetings can effect supply. Demand at $140 may be less than demand at $113 or the dollar at 1.58 vs, 1.46. Recessions do reduce demand and even supply in some cases. Conventional crude oil world peaked in 2005 as has the highest grade of crude, light sweet, if tar sand production is removed from being considered conventional at this time. World exports of crude oil are also in decline since 2005. Governments can stimulate demand for oil with subsidies, money supply, or deficit financing. Government can also lower demand with a variety of policies. Oil and gasoline are relatively inelastic and, like nicotine, it is difficult to stop using,in fact, to many, it is down right UN American to use less.
In such as important a commodity as oil there are many variables and, with traders, oil never moves in a straight line, but new highs can generally be expected over time with higher lows every year.IMO
Last edited by newman1979 on Sat Aug 16, 2008 6:22 am; edited 1 time in total
Posted: Fri Aug 15, 2008 9:27 pm Post subject: Re: $111 oil?
Buggy wrote:
I am completely disgusted by the fat, bloated, sweat pants wearing, wal-mart shopping, suv driving bottom dwellers in America. I am done with porked out, bloated, loud mouthed wenchbags hollering at their obese piglets in shopping lines. I long for an era where there are more good looking women than fat, nasty and smelly. Let the die off begin.
Posted: Fri Aug 15, 2008 11:06 pm Post subject: Re: $111 oil?
kiwichick wrote:
PATC when everyones selling thats a good time to start looking. as warren buffett says its like being an oversexed guy in a whorehouse. you don't know where to start first!!!
Joined: Apr 06, 2006 Posts: 3626 Location: 3 miles NW of Champoeg, Republic of Cascadia
Posted: Fri Aug 15, 2008 11:19 pm Post subject: Re: $111 oil?
JohnDenver wrote:
A lot of dumb schleps wandered in here in the spring and summer, bought into the commodity bubble at its peak, and got reamed. The "experts" in this forum should be taken out back and tarred and feathered.
The main problem with peak oiler thinking is a failure to understand the demand side. Peak oilers like to think of oil as oxygen, but it's really more like cigarettes -- a bad habit, hard to quit, but not really necessary.
And now that a pack is down a buck we'll be all the more likely not to light up? If you had a town of 1000 people representing the OCED only about 50 wouldn't be looking forward to their next Camel, if I was to take your flawed analogy to its conclusion.
Fact is there's only so much transition that can happen at once, which you refuse to admit or consider relevant, instead blogging about an electric tractor you saw on YouTube. Give me some real production statistics vs. possible rate of decline and we'll talk. _________________ Cogito, ergo non satis bibivi
C'mon man, who're you gonna believe?
Posted: Fri Aug 15, 2008 11:31 pm Post subject: Re: $111 oil?
MD wrote:
PeakingAroundtheCorner wrote:
Where is the absolute bottom. I read here somewhere that it's $110. But here we are just one dollar from breaking that supposed limit. Are we completely discredited now? What is causing oil to go down? What happens below $110? Will people begin buying SUVs again? Almost everything I've read here in the past months is now being smashed. How much money have you lost in this process?
No such thing as an absolute bottom. Discredit who? There is no consensus here to be discredited, so you'd have to cherry-pick in order to answer "yes" to your question. I haven't lost a dime as I don't gamble that way.
MD, There are plenty of posters on this forum who have been completely blindsided by the drop. Face it--people on this forum tend to get emotionally attached to a point of view and won't entertain alternative, opposing, or more complete interpretations of the price dynamics of oil. Anyone logging in in the past few months, and taking the more strident voices seriously has gotten whacked.
Joined: Apr 05, 2005 Posts: 2608 Location: South of Atlanta
Posted: Fri Aug 15, 2008 11:34 pm Post subject: Re: $111 oil?
JD, Ive made a bunch of money on moving oil prices watching and playing with USO and also airline stocks. Its like shooting fish in a barrel if you've been really paying attention here.
The folks who buy the "bubble" stuff or have waited until recently to buy are always the last place finishers. You have to do your own decision making and learn to be just a bit ahead of the curve. Sometimes your wrong, but with the wealth of knowledge and information sources here it hasn't been very hard to be just in front of the "too little too late crowd".
I bought USO at 47, sold most of it at 135 and im waiting patiently to jump right back in again very, very soon! Ive made money on the airline stocks too just watching the potential moves in oil. Those stocks are like puppets being pulled by oil price strings.
Joined: Aug 03, 2006 Posts: 4338 Location: Graceland
Posted: Sat Aug 16, 2008 12:23 am Post subject: Re: $111 oil?
Something else to think about is that part of the drop in the price of oil has been the inexplicable appreciation of the dollar, which has gone up about 8% in the last couple of weeks.
If the dollar had stayed where it was at a couple of weeks ago, oil would presumably be at least 8% higher in dollar terms, or about $123. A drop from $145 to $123 doesn't look all that dramatic, really.
That's still pretty expensive for the rest of the world.
It's hard to say where we go from here, but I think that the punishment that has been delivered to the oil services sector is completely off the mark. Those companies are going to have MORE business with oil closer to $100 than $150 per barrel, because there should be more economic activity in general at the lower price. _________________
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