Crude Oil - 'Read A Book _____'

Discussion in 'Economics' started by MiamiHurricanes, Oct 16, 2008.

  1. ok. This is really bad because of the racial connotation, but I had to throw it in because it typifies the US Congress. Search for 'Read a Book _____' (you gotta fill in the blank) on YouTube and think about our US Congressmen.

    WTF, when crude oil was ripping through $80, $90, $100, $110, $120, $130, AND $140 all we heard from government officials was supply/demand. So now crude oil is below $75.00 and there is such a big reversal change in supply/demand????

    They are with so paid $$$$$$ or so @#%@ing stupid, they need to read a book. ANY BOOK, NOT A SPORTS PAGE, NOT A MAGAZINE. But preferably some of the most relevant books about economics and financial markets would be a great start.

    I can't wait for more testimony by Congress on crude oil and other financial market issues because they are so on top of it.
  2. There are people on this forum who argued that these oil prices were driven purely by supply and demand and berated anybody who disagreed with them with calls to take "economics 101"

    Where are those oil bulls now? Will any show themselves?
  3. S2007S


    Oil bulls are hoping for $100 on oil, how can anyone think oil was going to $200 or even any higher than $150, OIL IS HEADED back below $50 a barrel and probably even lower than that as the world deals with one of the deepest recessions. Oil did not rise on supply and demand and talk about peak oil was just to drive oil higher, that was it, now oil has fallen 50% and predictions about $200 oil have disappeared, you would have to be a complete FOOL to think oil wasnt in a bubble along with the rest of the commodities, Im so sick and tired of the fools who always repeat, but this time its different, once you hear those words its time for the bubble to go pop. OIL was in a bubble and the rest of the commodities were also, im so glad to see everything drop like a rock as it was suppose since everything was already inflated.
  4. C'mon S2007S, it was a new paradigm!!! That time it was different - lofl.

    Every time one hears the words 'a new paradigm' it is time to get busy because there is a monster spec bubble about to explode...
  5. what people don't seem to understand - and it is scary considering that some trade commodities - is that it only takes a small pullback in demand to cause a huge pullback in price. Let me simplify it for you. You have a room with 10 people and everyone eats one pound of corn per day. If you only bring 9 pounds of corn into the room every day - then the price will be thousands of dollars a pound. If you bring 11 pounds of corn in per day then you will practically be giving it away at the end of the day (assuming it costs a lot to store as oil does). That is why you see oil, etc drop in value by 50% during recessions even though the consumption only drops a few percent. It is still not a smoking gun proving evil speculators magically control the market if that is what is being implied here. If on the other hand you are implying that oil is now in a long term bear market then all I can say is go sell far future options on that assumption - I don't mind taking your money.
  6. To clarify further, unlike currencies, oil is a more traceable market. Someone who is investigating should be able to do a better job of determining the cause of such price movements. This was a 100% rip and 50% retracement.
  7. All one has to do is go back a few weeks when oil shot up over $20 in a few hours yet the forward contracts were unchanged. Why? Speculators were caught short.

    At least a year ago some economists from the major refineries were saying that true supply/demand prices for oil were much lower than where the then current of price of oil was trading.
  8. aresky


    Crude Oil Rises a Second Day as OPEC Is Poised to Reduce Output

    By Nesa Subrahmaniyan and Gavin Evans

    Oct. 20 (Bloomberg) -- Crude oil rose for a second day in New York on speculation OPEC will lower output in an attempt to halt a slide in prices, which have fallen more than 50 percent from July's record.

    OPEC, supplier of about 40 percent of the world's oil, favors a cut and may pare output in stages to maintain stable prices as global growth weakens, said Chakib Khelil, the group's president. The Conference Board's index of leading U.S. indicators due today probably fell for a third time in September, according to a survey of economists.

    ``OPEC is just trying to pre-empt any sort of ongoing weakness in oil demand,'' Gavin Wendt, a senior resources analyst at Fat Prophets Funds Management in Sydney, said in an interview with Bloomberg Television. ``We're not going to see too much more downside in oil prices from here.''

    Crude oil for November delivery gained as much as $1.34, or 1.9 percent, to $73.19 a barrel in electronic trading on the New York Mercantile Exchange. It traded at $72.86 at 9:23 a.m. in Singapore.

    The contract rose $2, or 2.9 percent, to $71.85 on Oct. 17, its first gain in four days. Oil dropped 7.5 percent last week as slowing demand boosted fuel stockpiles. Prices tumbled to a 14-month low of $68.57 a barrel on Oct. 16.

    Brent crude oil for December settlement rose as much as $1.05, or 1.5 percent, to $70.65 a barrel on London's ICE Futures Europe exchange, and traded at $70.55 at 9:11 a.m. Singapore time.

    `Significant Cut'

    The Organization of Petroleum Exporting Countries brought forward to Oct. 24 a meeting planned for November to discuss output levels. Members of the group will meet in Vienna.

    While there is a consensus among the group's members to cut output, there's no agreement on the size of the reduction, and that could range between 1 million and 2 million barrels a day, Khelil, the group's president said in an interview on Algerian television yesterday.

    ``This may be OPEC's toughest balancing act in its history,'' said Tetsu Emori, the fund manager at Astmax Co. in Tokyo, Japan's biggest commodities asset manager with $200 million under management. ``By the time OPEC announces a cut, they would be hoping to have seen the bottom of the price.''

    Goldman Sachs Group Inc. and Merrill Lynch & Co. analysts say crude, which fell more than 50 percent from a record $147.27 a barrel in July to a 14-month low last week, may drop another 44 percent should the world economy slip into a recession.

    An OPEC reduction of 2 million barrels a day ``would be a significant cut,'' Fat Prophets' Wendt said.

    OPEC's 13 members produced 32.2 million barrels a day in September, according to a survey of analysts and producers.

    Options Contracts

    Stockpiles in the U.S., the world's largest consumer, increased 6 percent in the three weeks ended Oct. 10 as fuel use slowed. Daily gasoline demand, based on deliveries from refineries and terminals, fell to a three-year low of 8.69 million barrels in the week ended Oct. 3,

    Markets have been driven more by fear and panic than ``rational, considered'' analysis in recent months and global demand for oil products is still increasing faster than new production is being developed, Fat Prophets' Wendt said.

    Prices need to stabilize at about $80 a barrel to justify continued investment in exploration and development, he said.
  9. OPEC will attempt to cut production and ride oil back to the $80-$90 range.

    Saudi Arabia will veto the attempt, however, and we'll see $55 oil soon.
  10. clacy


    Isn't it more about the PERCEPTION of supply & demand in the future?
    #10     Oct 19, 2008