Oil's energy contribution has declined by about 12% since 1999. The world's economies have also declined by about 12%. (Using conventional metrics, which are time delayed determinations, this will only be seen in hind sight). The massive destruction of asset values now occurring testifies to it happening.
Peak is well behind us, world economies have peaked and will continue to decline.
Posted: Tue Sep 16, 2008 2:24 pm Post subject: Re: Another Record ($147.27)
Good news for oil today in the equity markets.
Oil stocks as seen by the oil stock index dropped hard to new lows today but then reversed very strongly and ended up forming something on the technical charts called a hand grenade when the stocks ended up 3% today.
This is bullish for energy stocks and we finally saw today an intraday V bottom and capitulation that I believe should allow energy stocks to go up from here.
The energy stocks usually lead the price of oil so we may see a bottom soon for oil. Not calling one any more!
But maybe a really negative inventory report tomorrow could be what is needed to make oil start to recover?
Chuck
Last edited by chuck6877 on Tue Sep 16, 2008 2:33 pm; edited 1 time in total
Joined: Sep 16, 2004 Posts: 4934 Location: Southwest WI
Posted: Tue Sep 16, 2008 2:31 pm Post subject: Re: Another Record ($147.27)
So *****if***** they can get this gasoline thing figured out, then we ******should***** see prices at the pump drop... I won't hold my breath! _________________ Clothing should be optional.
Posted: Tue Sep 16, 2008 4:12 pm Post subject: Re: Another Record ($147.27)
chuck6877 wrote:
Good news for oil today in the equity markets.
Oil stocks as seen by the oil stock index dropped hard to new lows today but then reversed very strongly and ended up forming something on the technical charts called a hand grenade when the stocks ended up 3% today.
This is bullish for energy stocks and we finally saw today an intraday V bottom and capitulation that I believe should allow energy stocks to go up from here.
The energy stocks usually lead the price of oil so we may see a bottom soon for oil. Not calling one any more!
But maybe a really negative inventory report tomorrow could be what is needed to make oil start to recover?
Chuck
i thought it would be the election and the end of the invisible hand
that would mark a bottom for oil.
Bernanke did an excellent job of crashing the commodities since july, just amazing, never seen anything, look at any commodity stock and see the relentless sell off, and blast off for
the USD.
Posted: Tue Sep 16, 2008 5:05 pm Post subject: Re: Another Record ($147.27)
AirlinePilot wrote:
Panic buying on the way up, by those who actually use and take delivery of oil not wanting to get caught paying more than they need to.
Fear selling on the way down by morons caught in a cycle of ludicrous greed (read failing banking system).
Yeah. It wasn't really obvious to me at the time, but in retrospect, what happened is pretty logical. There were a lot of people out there pretty desperate to hedge themselves against rising petroleum costs. They ended up creating a bidding frenzy that drove futures prices way above where they needed to be. It really reflects how emotionally sensitive petroleum is. People realize it's their life blood and they freak out at the idea of not being able to get enough.
As far as I can see, this whole business with the banks and whatever is really a misnomer. What's happening in the economy right now is contraction due to peak oil. We all thought the airlines would be the canary in the mineshaft. It turns out that the most sensitive canary was the McMansion. As the economy adapts to the changes, petroleum usage is falling. There's plenty of supply for the moment, so all the ostridges have stuck their head back in the sand and decided the problem is over. Since there's momentarily enough oil to go around, nobody wants to pay for it. Oil prices will have to find a bottom, build support, demand will go back up, and then we'll be ready for the next act. _________________ "We were standing on the edges
Of a thousand burning bridges
Sifting through the ashes every day
What we thought would never end
Now is nothing more than a memory
The way things were before
I lost my way" - OCMS
Joined: Apr 28, 2005 Posts: 3920 Location: West shore Lake Eire, MI, USA
Posted: Tue Sep 16, 2008 5:15 pm Post subject: Re: Another Record ($147.27)
Look at it from Putin's POV, currently Russia exports about 6.5 Mbbl/d of crude oil. Two weeks ago they were selling that oil for $110.00 more or less. Today they could only sell it for $90.00 more or less. That is a loss of $130 Million dollar a day gross in revenue. If they cut exports to 5 Mbbl/d the price will have to go up due to demand vs supply factors. Nobody out there can ramp up by 1.5 Mbbl/day to cover the shut in, at most KSA could add .75 Mbbl/d immediatly. So logically unless the world really is dropping off a cliff the price would rebound significantly. And it would also 'send a message' to Western Europe.
Conversely Russia could just announce they are setting an export price of $125.00 per barrel and refuse to sell for below that. Everyone else staining at max output would still leave Russia exporting between 4 and 5 Mbbl/day, and even if it were 4 they would be resting their fields while the others were straining flat out and causing earlier declines in OPEC countries, leaving Russia with more capacity and more power five years down the road. _________________ Always appeal to a man's enlightened self interest, you can trust him to look out for himself honestly, It's when you appeal to his Honor or the Common Good that he stops paying attention.
Joined: Apr 05, 2005 Posts: 2616 Location: South of Atlanta
Posted: Tue Sep 16, 2008 9:56 pm Post subject: Re: Another Record ($147.27)
smallpoxgirl wrote:
What's happening in the economy right now is contraction due to peak oil. We all thought the airlines would be the canary in the mineshaft. It turns out that the most sensitive canary was the McMansion. As the economy adapts to the changes, petroleum usage is falling. There's plenty of supply for the moment, so all the ostridges have stuck their head back in the sand and decided the problem is over. Since there's momentarily enough oil to go around, nobody wants to pay for it. Oil prices will have to find a bottom, build support, demand will go back up, and then we'll be ready for the next act.
I'm not so sure about the contraction yet due to Peak. I don't really think we are far enough along yet for that to be measurably rearing its head yet. I really am starting to believe that this is more about a colossal back room Fark up by the government and the banking/investment industry because they just got too greedy. They forgot that you can't do this kind of thing forever without occasionally going back to something more reasonable in terms of borrowing/lending and making money. Instead they got carried away like any greedy gangster usually does, that plus a feeling of untouchability I think has put us into this altered state with respect to world markets and how they function. We may or may not be able to recover from it. Only time will tell.
I don't buy into the price of crude resembling any sort of credibility at the moment. The current price doesn't have a basis in reality. I believe that we have gone too far the other way now with the downward pressure and fear. It may take some time, and it will be dependent on how badly this latest train wreck fools with worldwide economies, but oil will probably come back towards somewhere around 105-115 and stabilize for a while due to production and discovery costs.
The fundamentals will prevail in the long run, I have no doubt. What I think no one can currently predict though is how far and how deep do we have to sink in order to move back towards something resembling normalcy. It just may be that this completely and totally confuses and obfuscates Peak oil for a very long time to come.
That's a darn shame as all our efforts at creating any momentum towards a post peak sustainable world get trashed by the false signal of declining oil price. Now all that just dries up and floats away into the wind.
Peak oil? Nah, just some crazy folks on the interweb worried about doom and gloom.
Posted: Tue Sep 16, 2008 10:15 pm Post subject: Re: Another Record ($147.27)
AirlinePilot wrote:
I really am starting to believe that this is more about a colossal back room Fark up by the government and the banking/investment industry because they just got too greedy. They forgot that you can't do this kind of thing forever without occasionally going back to something more reasonable in terms of borrowing/lending and making money. Instead they got carried away like any greedy gangster usually does, that plus a feeling of untouchability
It wasn't just the bankers. Joe Blow was doing the same thing. Instead of paying down his house, he took out 2 or 3 mortgages and spent the money on consumer goods from China. It all worked well, until $3-4 gasoline came along. As soon as it cost $100 to fill up the Escalade, Joe Blow had a liquidity crisis and defaulted on his debts. Then BS, Indymac, F&F, Lehman, and AIG did the same thing. The reason we have a liquidity crisis is real simple. We're sending all our liquidity to Saudi Arabia in exchange for oil. When all the money goes to OPEC instead of going round and round in America, that's called a liquidity crisis. We've been forestalling it for several decades by pawning off everything of value in the country. Oil shot up about the time that we ran out of things to pawn, and the whole thing came to a head.
So now the Fed is doing the only thing it can do. Stick it's fingers in it's ears, close it's eyes, and shout "La La La La" in the hopes that the whole problem will go away. It won't. The fed, in the end, is bankrolled by the same guy who couldn't pay his mortgage and started all this. Guess what. 300,000,000 Joe Blows can't pay eachother's mortgages if none of them can afford to pay his own. _________________ "We were standing on the edges
Of a thousand burning bridges
Sifting through the ashes every day
What we thought would never end
Now is nothing more than a memory
The way things were before
I lost my way" - OCMS
Joined: Apr 28, 2005 Posts: 3920 Location: West shore Lake Eire, MI, USA
Posted: Wed Sep 17, 2008 5:49 am Post subject: Re: Another Record ($147.27)
smallpoxgirl wrote:
So now the Fed is doing the only thing it can do. Stick it's fingers in it's ears, close it's eyes, and shout "La La La La" in the hopes that the whole problem will go away. It won't. The fed, in the end, is bankrolled by the same guy who couldn't pay his mortgage and started all this. Guess what. 300,000,000 Joe Blows can't pay eachother's mortgages if none of them can afford to pay his own.
Fortunately for you, I and most other people with a mortgage didn't go Yuppy retarded and we are still paying our mortgages and other debts. Somewhere around 89% of us are current on our debts and will stay current because we (en masse) got scared by the housing bubble and started using more common sense in our debt decisions.
The trouble happens if and only if the economy starts slowing significantly and putting us average joes on unemployment, because that doesn't pay enough to keep up with all these bills we accumulated inthe fat times. _________________ Always appeal to a man's enlightened self interest, you can trust him to look out for himself honestly, It's when you appeal to his Honor or the Common Good that he stops paying attention.
Joined: Sep 16, 2004 Posts: 4934 Location: Southwest WI
Posted: Wed Sep 17, 2008 1:01 pm Post subject: Re: Another Record ($147.27)
So oil goes from about $91 to $96 today... PM's went right along for the ride. Natural gas also was up 36cents... I keep an eye on that one because the holiday heating season is coming up! ho ho ho _________________ Clothing should be optional.
Posted: Fri Sep 19, 2008 4:43 pm Post subject: Re: Another Record ($147.27)
Spike at the end of the day. Are we in for another big run up.
I think we have left the bumpy plateau and are entering the spiky plateau. Volitility on every front will get wilder and wilder.
As the stock market skyrockets after shorters have been banished, oil will likely follow. And then the inevitable crash will come for both stocks and oil prices.
Stock recovery after that will be difficult. But oil will likely go up, unless we are really at the point where no one can buy it.
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I hedged my comments a lot huh? 
