Taodr, I agree with your assessment of fundamentals . Geometrically speaking there should be a top about 5 days from now, then 5 % reduction .
we were gently stopped out, not slammed this morning on the DJIA longs. we are back long the DJIA after 2 entry attempts at the channel break. LONG DJIA. Short OIL surfer
I'm just trying to point out you look foolish by quoting platitudes. The trend could be up or down depending on your timeframe, and you only say "I told you so" after surf's trades are down. Very lame. (i.e. you say "it's a bull market" yet you say "short djia" so which is it? or is it either one (the other one) depending on whether surf loses)
greenspan's talk on oil holding OIL short here U.S. Fed Chairman Greenspan Speaks on Oil Market (Text) 2004-10-15 12:00 (New York) Oct. 15 (Bloomberg) -- The following is the text of Federal Reserve Chairman Alan Greenspan's speech on the oil market to the National Italian American Foundation in Washington: Owing to the current turmoil in oil markets, a number of analysts have raised the specter of the world soon running out of oil. This concern emerges periodically in large measure because of the inherent uncertainty of estimates of worldwide reserves. Such episodes of heightened anxiety about pending depletion date back a century and more. But, unlike past concerns, the current situation reflects an increasing fear that existing reserves and productive crude oil capacity have become subject to potential geopolitical adversity. These anxieties patently are not frivolous given the stark realities evident in many areas of the world. While there are concerns of seeming inadequate levels of investment to meet expected rising world demand for oil over coming decades, technology, given a more supportive environment, is likely to ensure the needed supplies, at least for a very long while. Notwithstanding the recent paucity of discoveries of new major oil fields, innovation has proved adequate to meet ever- rising demands for oil. Increasingly sophisticated techniques have facilitated far deeper drilling of promising fields, especially offshore, and have significantly increased the average proportion of oil reserves eventually brought to the surface. During the past decade, despite more than 250 billion barrels of oil extracted worldwide, net proved reserves rose in excess of 100 billion barrels. That is, gross additions to reserves have significantly exceeded the extraction of oil the reserves replaced. Indeed, in fields where, two decades ago, roughly one- third of the oil in place ultimately could be extracted, almost half appears to be recoverable today. I exclude from these calculations the reported vast reserves of so-called unconventional oils such as Canadian tar sands and Venezuelan heavy oil. Gains in proved reserves have been concentrated among OPEC members, though proved reserves in the United States, for the most part offshore, apparently have risen slightly during the past five years. The uptrend in world proved reserves is likely to continue at least for awhile. Oil service firms still report significant involvement in reservoir extension and enhancement. Nonetheless, growing uncertainties about the long-term security of world oil production, especially in the Middle East, have been pressing oil prices sharply higher. These heightened worries about the reliability of supply have led to a pronounced increase in the demand to hold larger precautionary inventories of oil. In addition to the ongoing endeavors of the oil industry to build inventories, demand from investors who have accumulated large net long positions in distant oil futures and options is expanding once again. Such speculative positions are claims against future oil holdings of oil firms$10 per barrel since late August, to an exceptionally high $17 a barrel. While spot prices for WTI soared in recent weeks to meet the rising demand for light products, prices of heavier crudes lagged. This temporary partial fragmentation of the crude oil market has clearly pushed gasoline prices higher than would have been the case were all crudes available to supply the demand for lighter grades of oil products. Moreover, gasoline prices are no longer buffered against increasing crude oil costs as they were during the summer surge in crude oil prices. Earlier refinery capacity shortages had augmented gasoline refinery-marketing margins by 20 to 30 cents per gallon. But those elevated margins were quickly eroded by competition, thus allowing gasoline prices to actually fall during the summer months even as crude oil prices remained firm. That cushion no longer exists. Refinery- marketing margins are back to normal and, hence, future gasoline and home heating oil prices will likely mirror changes in costs of light crude oil. With increasing investment in upgrading capacity at refineries, the short-term refinery problem will be resolved. More worrisome are the longer-term uncertainties that in recent years have been boosting prices in distant futures markets for oil. Between 1990 and 2000, although spot crude oil prices ranged between $11 and $40 per barrel for WTI crude, distant futures exhibited little variation around $20 per barrel. The presumption was that temporary increases in demand or shortfalls of supply would lead producers, with sufficient time to seek, discover, drill, and lift oil, or expand reservoir recovery from existing fields, to raise output by enough to eventually cause prices to fall back to the presumed long-term marginal cost of extracting oil. Even an increasingly inhospitable and costly exploratory environment -- an environment that reflects more than a century of draining the more immediately accessible sources of crude oil -- did not seem to weigh significantly on distant price prospects. Such long-term price tranquility has faded dramatically over the past four years. Prices for delivery in 2010 of light, low- sulphur crude rose to more than $35 per barrel when spot prices touched near $49 per barrel in late August. Rising geopolitical concerns about insecure reserves and the lack of investment to exploit them appear to be the key sources of upward pressure on distant future prices. However, the most recent runup in spot prices to nearly $55 per barrel, attributed largely to the destructive effects of Hurricane Ivan, left the price for delivery in 2010 barely above its August high. This suggests that part of the recent rise in spot prices is expected to wash out over the longer run. Should future balances between supply and demand remain precarious, incentives for oil consumers in developed countries to decrease the oil intensity of their economies will doubtless continue. Presumably, similar developments will emerge in the large oil-consuming developing economies. Elevated long-term oil futures prices, if sustained at current levels or higher, would no doubt alter the extent of, and manner in which, the world consumes oil. Much of the capital infrastructure of the United States and elsewhere was built in anticipation of lower real oil prices than currently prevail or are anticipated for the future. Unless oil prices fall back, some of the more oil-intensive parts of our capital stock would lose part of their competitive edge and presumably be displaced, as was the case following the price increases of the late 1970s. Those prices reduced the subsequent oil intensity of the U.S. economy by almost half. Much of the oil displacement occurred by 1985, within a few years of the peak in the real price of oil. Progress in reducing oil intensity has continued since then, but at a lessened pace. The extraordinary uncertainties about oil prices of late are reminiscent of the early years of oil development. Over the past few decades, crude oil prices have been determined largely by international market participants, especially OPEC. But that was not always the case. In the early twentieth century, pricing power was firmly in the hands of Americans, predominately John D. Rockefeller and Standard Oil. Reportedly appalled by the volatility of crude oil prices in the early years of the petroleum industry, Rockefeller endeavored with some success to control those prices. After the breakup of Standard Oil in 1911, pricing power remained with the United States -- first with the U.S. oil companies and later with the Texas Railroad Commission, which raised allowable output to suppress price spikes and cut output to prevent sharp price declines. Indeed, as late as 1952, U.S. crude oil production (44 percent of which was in Texas) still accounted for more than half of the world total. However, that historical role came to an end in 1971, when excess crude oil capacity in the United States was finally EDITED for length restrictions
d-oh! Bad move on Greenspan's part imho. Strong hands aren't going to change their minds just b/c he gave a speech -especially given his track record of prognostication- and he risks the danger of appearing desperate. If anything his remarks may inspire more little guys to step into the squeeze (no offense surf)... we may drop here yet, but so far it's a classic case and new highs will give profitable trendfollowers a chance to grind it in...