I swear... longing oil in this market is the greatest orgasm known to man. I could not log-in last night when the BP pipe shutdown hit the wires otherwise I would have posted this earlier. I played by shorting USDCAD... now let's just hope the fed doesn't f-uck up my trade. If he does, then I'm practically guaranteed that one more GoM hurricane will push oil to $88.
keep in mind that you're trading against these well financed chaps..... http://www.federalreserve.gov/boarddocs/Press/orders/2005/20051118/attachment.pdf
btw, oil should have been up $10 today, I mean 8% of US demand offline....and GOM production still below normal...... I quit trading oil for the same reason I'm exiting my gold positions.....guess why
Markets will continue to shrug this off. Oil is a global commodity. Alaska is a drop in the bucket in the world market. If oil prices were driven only by US inventories, it would be $40, not $80. Today the US is awash in crude, not even counting the SPR which will be cracked open on the slightest hint of domestic shortage in an election year. BP has a reasonably well understood technical problem that can be fixed on a relatively predictable schedule. Try saying that about Iran. Long story short, this isn't the kind of disruption that keeps oil traders awake at night. Martin
the world is awash in heavy sour.... SPR is of little help since there are no direct pipelines to the west coast from the GOM.... also, less oil thru the Alaska line means the reduced flow won't be enough to maintain heat throughout the line....so they will have to heat the crude at selected points which will drive up transport costs..... BP screwed up...if they knew that the lines would need to be replaced in advance , they would have laid companion lines to prevent a field shutdown....
<i>the world is awash in heavy sour....</i> Today, the US is awash in light sweet. <i>SPR is of little help since there are no direct pipelines to the west coast from the GOM....</i> So imports flow to the west instead of the east. Oil is fungible. Summer driving season is winding down soon and oil heating is an east coast thing. Anyway, world oil prices don't care if gas is expensive in California. <i>so they will have to heat the crude at selected points which will drive up transport costs.....</i> Adding perhaps a few dollars per barrel to perhaps 0.4% of world supply. <i>BP screwed up...</i> No argument there. Martin
Anyone really 'long oil' is backing up the truck on BPT right now. New pipes simply means the oil will be sold at later, higher prices and near-term dividends will be deferred in favor of larger dividends at a later date. That is if it remains a bull market.
does anyone know if BP will have to declare a "force majeure" (remove their liability to deliever some oil/contracts as a result of the pipeline being shutdown)? If so, does anyone have an idea how this can get priced into Crude?