Wow, so now oil has peaked, I guess all that talk about Peak oil has been totally forgotten.... Lehman says oil prices have peaked Fri Aug 8, 2008 4:33pm EDT NEW YORK (Reuters) - Oil prices have peaked for the next few years amid signs tight supply and demand fundamentals are loosening, Lehman Brothers said on Friday. "Barring a physical disruption that may temporarily spike prices, we judge that oil prices have peaked for the next few years," Lehman said in a research note. "In our view, the recent correction in oil prices was overdue and softness awaits in the next 12 months." Oil prices hit a record over $147 on July 11 after surging demand from emerging markets like China ignited a six year rally that sent prices up sevenfold at their peak. Demand in the United States and other consumer nations has faltered under record fuel prices, helping to push oil down more than 20 percent from the all-time high. In addition, the end of precautionary inventory building ahead of the Olympics by China and rising exports by OPEC kingpin Saudi Arabia are also weighing on prices, Lehman said. "We judge that fundamental looseness is already emerging," the investment bank said. "Saudi Arabia again appears to be playing the role of swing supplier, pumping 500,000 barrels per day more than three months ago." "Furthermore, a tipping point appears to have been reached in demand in numerous Asian markets." Lehman said speculator interest, which added to crude's bullish run this year as investors bought commodities to hedge against rising inflation and the week dollar, was shifting as well. "From a high near 130,000 contracts (on the New York Mercantile Exchange) long last year, net length has declined and even gone into net short territory in recent weeks," the bank said. "Whether due to the attention of regulators or because of a different read on fundamentals, speculators have certainly changed their sentiment." In a bid to ease high fuel prices, the U.S. Congress is considering legislation to limit speculative positions that can be held.
I would hasten to point out that this is actually bullish . . . The recent COT report on Nat-Gas ( as of Aug. 5th ) actually shows Commercials getting longer, and reducing their short positions. Peak Oil you ask? Matt Simmons is still here . . . http://www.youtube.com/watch?v=4IwtAQzrfiw&feature=related Matt Simmons, from Feb. 1, 2007 calling for $300 per barrel oil. http://www.youtube.com/swf/l.swf?vi...rfUWcX2ypsnCUjyhI8t7&use_get_video_info=1&hl= Matt Simmons from July 11th, 2008 on CNBC saying that there is a false belief that this is merely a "temporary" oil spike.
It is by definition that speculators can be long or short the market without the physical ability to deliver or absorb the underlying commodity. You can't assign intent to their actions.
It's interestingly funny to hear a bunch of Economists and Analysts yakking the same ol' thing... Let's see how OPEC reacts to all this pressure... Honestly, it's all speculation. No one has done or changed anything about oil prices, yet. If Lehman or others have mentioned about a change in policy that can start a cause of flow to lowering oil prices then it's somewhat fine... But even a Freshman in High School can talk about Supply/Demand.
Matt Simmons is a quack and has been out talking his book for year's on the media's dime, just as T. Boone has...$300/bbl. oil is a long way off and so is peak oil, in my opinion.
even on ET you will not get any respect by shitting on respectable guy like pickens: a) he was right about oil (as simmons was) and b) he gives a lot of money away for good. to say that they talk their book for years is crazy - why do you think they were long in the first place? i guess it did not occur to you that they just do what they believe in... $300 is a strech, i concur, but we are past the peak oil - just do you homework, e.g check out satellite imagery on ghawar, check out production/consumption profile curves etc. fu