Another Record ($147.27)

DantesPeak · Posted: Fri Aug 22, 2008 5:02 pm Post subject: Re: Another Record ($147.27)

Fed chief Bernanke may have encouraged a sharp fall off in commodities, including oil, today. While he did not exactly say what was reported in the media, that is inflation would moderate, his words were interpreted as saying so. Actually he said inflation might moderate if commodity prices stayed down. Duh! Thank you Bernanke for enlightening us.

In the real world, it appears energy prices at this level will not - repeat not - create demand destruction for transportation fuels in the US. Despite much hype in the media about a drop in miles driven, in the latest four weeks as compared to last year, US refineries supplied almost exactly the same amount of gasoline and distillates (diesel) as in 2007. If the latest energy price drop sticks, we will actually see gasoline + distillate demand increase over last year's levels. Today's word from wholesale oil traders is that due to a good grain harvest, diesel demand in the Midwest US is very strong.

Ironically as energy prices drop, so do gasoline inventories. $115 oil may not be a low enough price in the US to kill off enough transportation demand to leave us with adequate supplies.

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smallpoxgirl · Moderator Joined: Nov 08, 2004 Posts: 6480

Yeah. That was some sell off today huh? Obviously raises the possibility that the oil bear market is going to resume. I'm not sure that's the case though. One obvious driver behind oil today was that the dollar rebounded today after selling off sharply yesterday. In the bigger picture the dollar looks to me like it's about to fall back down to it's June level. I wouldn't count the oil bulls out just yet though they clearly took a beating today.
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joeltrout · Light Sweet Crude Joined: Sep 19, 2007 Posts: 1317

The oil markets seem to have no idea what they want to do. People thought predicting prices was tough before. Now everyone knows it is impossible.

joeltrout

chuck6877 · Intermediate Crude Joined: May 16, 2005 Posts: 532

There's a really good resistance level at $122.00.

When oil couldn't break $122 it broke down today.

We'll probably be rangebound for a while between $111 and $122 until the market can make up its mind when it wants to rally....

Chuck

DantesPeak · Posted: Tue Aug 26, 2008 7:16 am Post subject: Re: Another Record ($147.27)

Strangely, even after Hurricane Gustav was reported to be about 100 mph and headed for the GOM, oil was down $2. In the last 4 hours it has moved back up $3 to be up about $1.

The most direct price effect of any hurricane stike on Gulf infrastructure will likely be for gasoline, closely follwed by diesel, as inventories right now are low - especially for gasoline.
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AirlinePilot · Posted: Tue Aug 26, 2008 11:22 am Post subject: Re: Another Record ($147.27)

Give Gustav a few days to get into the GOM, then I think you'll see the bump.

I'm worried about this one. Thinking perfect storm stuff here. Just imagine a flare up in the Caspian region with US forces and this storm ripping up Houston as a cat-3/4.

Standing by.

DantesPeak · Posted: Tue Aug 26, 2008 3:39 pm Post subject: Re: Another Record ($147.27)

DantesPeak · Posted: Tue Aug 26, 2008 7:05 pm Post subject: Re: Another Record ($147.27)

Oil up $1 in the last hour, I guess from weather service reports Gustav will be a category hurricane in the Gulf of Mexico.
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AirlinePilot · Posted: Tue Aug 26, 2008 11:56 pm Post subject: Re: Another Record ($147.27)

The hype in the press about Gustav is reaching pretty much Epic proportions. After a storm like Katrina its easy money for them and a way to generate huge dollars by selling the doom.

I'm gonna go buy 15-20 gallons of gas tommorow before things get out of hand.

I'm wondering if this gets blown out of proportion if it is possible that this could be a "trigger" event for hoarding and an overnight major draw on gasoline inventory. Even if it only affects the Gulf coast states it might just be enough to topple things with gasoline supply.

It's going to be interesting to see if an event like this can thrust us quickly into widespread shortages or if the system is robust enough to handle it. We may really get a taste of what MOL really is.

TWilliam · Light Sweet Crude Joined: Nov 28, 2004 Posts: 1799

firestarter · Light Sweet Crude Joined: Mar 19, 2006 Posts: 1181

Why is oil down $4? Incredible.
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Forney2008 · Posted: Thu Aug 28, 2008 10:29 am Post subject: Re: Another Record ($147.27)

Because the dollar rose because of the governments BS GDP growth report of 3.3 percent because the GDP deflater was only 2.1 percent. Yeah right.. Laughing

gnm · Posted: Thu Aug 28, 2008 10:35 am Post subject: Re: Another Record ($147.27)

well heres what the pundits at bloomberg are saying...

Oil Declines as Supply of Natural Gas, a Competing Fuel, Rises

Yeah right, that'll teach them oil gougers! I'll just run out and fill my tank with cheap abundant natural gas! Since its a competing fuel and all.... Rolling Eyes

-G

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frankthetank · Posted: Thu Aug 28, 2008 1:38 pm Post subject: Re: Another Record ($147.27)

Holy cow... This is just amazing. A soon to be major hurricane (most likely) is going to plow through the oil fields in the gulf in a few days,
I do have to say that i believe there is huge manipulation being played everyday on Wall St. Anything to keep the markets propped up, dollar up and PMs/etc in the hole...
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firestarter · Light Sweet Crude Joined: Mar 19, 2006 Posts: 1181

Right on, Frank. There's a distinct possibility of two major hurricanes in the GOM at the same time and oil traders are essentially saying ho hum. Perhaps these are the same folks who gave us that bogus GDP number this am.
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