I agree with your long term view - oil and gold will be crap - but its a little early to turn that into a trading strategy, maybe 7-10 years early. An oil spike won't rebound to original price levels unless either demand destruction occurs or the catalyst causing that spike proves benign. ie.. Iran cutting off arab oil shipments to the west in a multi year effort to spite us will not result in a temporary spike (less than a few months). The only way out of that will be demand destruction or vast production increases (not possible if peak oil is true).
not necessarily... simply put, i don't believe Iran nor the US nor the Quartet etc want / will allow WW3... and thats the only thing that cld have a long lasting effect on prices... as for supply / demand i suggest u do a little more research... there's an excellent thread on ET btw http://www.elitetrader.com/vb/showthread.php?threadid=66669 with excellent contributions from limitdown the thread starter, mtzianos on price discovery mechanism and actual supply / demand situation, etc etc... Pickens, Rogers etc are just self-serving...
I've read that thread already, and while I agree broken price discovery mechanism issues and hedge funds' affect on the markets are substantial, nothing changes the level of vulnerability to oil shocks we're at right now. The speculation premium only exists because the fundamental other issues. That thread's arguments are moot as nothing will change the problem quick enough from speculation premiums short of fast corrections that will NEVER possibly happen in the current oil-well-owning administration: removing excessive leverage from energy futures, adding and differentiating different crude types to exchanges, etc. Anyway, even if there is a glut of sour crude on the market, its moot, since we need gasoline for our cars, not sour crude. When enough refineries are built that process sour crude nicely, then this will affect demand on the underlying. Again, a stupid argument, as these problems (building refineries) can't be solved in 3 weeks and an imminent supply crisis can happen in 1 day. Cut off 2 or 3 million barrels a day from a market, only 3-4% of total supply, and we are left with the same fundamental problem: not enough of the resource that truly backs world economic growth: oil. (not gold) I hope Iran doesn't want it, but who knows... They aren't exactly the most passive nation as of late in their dealings with the west. And they are in control of this dilemma, not us, don't fool yourself. The market sees this. Isn't it amazing just 5 years later, in a post Sep 11 era, that we are more vulnerable than ever to a global economic crisis by a non militaristic action (Iran merely ceasing oil exports) by the similar extreme fundamentalist 'enemy' that we were so proud to blunder billions to claim victory against? What a war in vain. Its a joke because Iran doesn't even need to act militaristic and block shipping channels to cause a giant crisis. Very scary. Oil is not at $35 right now because just one rogue country can throw the whole world economy off with little effort. And get two or three to work together (ie Venezuela, Iran, Nigeria), and you have a true nightmare. We're too late for a quick fix - the whole global economy is hanging on a thread, and too many people are in denial. Our continued complacency to tackle these issues head on will kill our economy, and that seems the only thing inevitable.
oh christ. this is laughable. so a $100+ spike isn't $100 oil? Who cares how long it lasts, I only need it to last long enough to sell my contracts... I don't get it? Surfer is saying $100 oil isn't going to happen. In fact he even said we'll see 50 before 80, or something to that effect. What are YOU reading? B/C we're obviously not reading the same thing... Maybe you should read the thread from the beginning if you care to comment...
I agree about the surprising difference in price between gasoline and electricity. If, as you say, we are going to be charging up rather than gassing up, maybe we dont have to wait three years? This electric car is here now with driving cost of 1 cent per mile. Beats the Ferrari and the Porsche too. It is expensive now but I am sure competitors will come around. http://www.teslamotors.com/ . 100% electric . 0 to 60 in about 4 seconds . 135 mpg equivalent . 250 miles per charge . about 1c per mile
50 before 80 wld be a pretty bold call, but 50 b4 100 when oil is 75ish?? in any case, yes its important how long a product stays at or above / below a level... as u'll find out, yr expectations WILL change as price moves... the profit your contemplating today is not the profit u'll be contemplating / hopefully registering tomorrow ;-) cheers
i don't... and i don't believe we do... and it doesn't take much to do without... unless one is willing to pay anything for gas... in which case as a trader i wld be more than happy to go long gas for as far as it can go, no mercy...
Just keeping this thread prominent for when "I told you so" is appropriate. Also for sharing the crow around, if not.