richjoy

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  • Is It Time to Bet Against Oil?
    OK, let's open the SPR, drain up to 50% of it by auctioning it to all bidders. (a) How will that affect pump prices when refiners need a greater margin? (b) Can you think of a worse time to drain the SPR than when it looks like there will be an attack on Iran? (c) If attacked, what happens to oil supply and pump prices when Iran closes the Straits of Hormoz? (d) If you think expensive gasoline is your MOST SERIOUS problem, what will you think is your most serious problem when the pumps are dry because the SPR is dry, and there is no gasoline at any price?
    Jul 09 15:35 pm |Rating: 0 0 |Link to Comment |View article
  • Oil: Time for Caution
    blah, blah, blah. OK...the world has a serious LIQUID FUELS problem. Econ 101 follows:

    Worldwide oil demand has nudged or even exceeded supply. That means prices rise, and keep rising, to squeeze out the marginal buyers.

    At the moment, oil is subsidized in many countries where oil demand is growing far faster than in the USA (though with about 5% of population, for years we have consumed about 25% of the world's oil...now billions more want what we have). Therefore, even if we decrease our oil demand by 5 or 10%, that savings will soon be lost against a much faster growing world demand among the other 95% of the world's population.

    Reducing oil to $100/barrel and below is on the horizon, and $50 or less, is just over the horizon. It is quite likely there will be much more demand destriction than most can visualize. Because:

    As gasoline reaches $6, $8, and $10, worldwide demand destruction will grow rapidly as fuel consumes a larger and larger portion of incomes, resulting in tens of thousands of large and small businesses are elimated, and millions of jobs lost. That tipping-point (and severe recession/worse) is more likely than we like to think. We may well see $2 gasoline...and wish we hadn't.

    Unfortunately, it will be about 10 years before new oil fields and new liquid fuels, or enough hybrids, are in place to add substantially to today's supply...if we can ever agree to start, and what needs to be done!

    It is that simple...and that serious to your economic future (and sadly, that of your children and grandchildren). This goes FAR beyond the bankruptcy of car companies, airlines hotels/resorts, state and city governments. Gasoline is life to billions!...wars have been fought for less!
    Jul 03 20:48 pm |Rating: 0 0 |Link to Comment |View article
  • Nigeria: The Elephant in the Corner
    Thanks Jim...we need your well-reasoned voice!
    Jun 28 12:08 pm |Rating: 0 0 |Link to Comment |View article
  • We Should Pay More Attention to Nigeria's War
    Thanks Jim (for another inciteful article).
    I too have wondered why we are not told more about the Nigerian conflict. Your suggestions have merit.
    Jun 25 20:20 pm |Rating: 0 0 |Link to Comment |View article
  • Crude Oil Prices: Bears Will Soon Win Out
    Well CJ-49, after you have "successfully&quo... corrected the oil price problem, I suppose you will also "successfully&quo... correct our cost of healthcare problem by eleminating doctors and hospitals...that should do it.
    May 27 08:02 am |Rating: 0 0 |Link to Comment |View article
  • Crude Oil Prices: Bears Will Soon Win Out
    Last week T. Boone Pickens (and I respect him) said [as near as I can recall] "...it is all about supply and demand--you can forget about speculators and the U.S. dollar...there are 85 million barrels being pumped from the ground and demand is 87 million barrels"

    I do think supply/demand is the CORE ISSUE, today and looking forward.

    I also think there are a number of other issues and influences--including, but not limited to: U.S. dollar, speculation, shortage of refining capacity, strikes, terriorism, threat of terriorism, greedy OPEC manipulators (including Iraq and Vennesula), peak oil theory, depletion of large oil fields, Saudia Arabia may have far few reserves than claimed, exponential demand curve in Chindia, greatly increased costs for ultra-deep drilling, etc., that add both fear and complexities to oil pricing.

    Thus we have a temporary price bubble...this temporary bubble can last until demand declines (because it will be a very long time before supply increases significantly.
    May 26 15:28 pm |Rating: 0 0 |Link to Comment |View article
  • Crude Oil Prices: Bears Will Soon Win Out
    The topic has been pretty well developed. I am surprised that some oil bulls don't seem to realize that the bubble can be burst--and oil prices can afterward resume there climb (probably at a slower pace if those who are 'burned' are reluctant to invest so heavily again).

    I would add that margin requirements are not "cast in stone"--they have been changed in past years to meet a variety of circumstances (for example, do the excesses of 1929 ring a bell?), and will likely be changed again. As for moving trades to London, if the USA and England were to move in concert, London trades would offer no advantage.
    May 26 14:49 pm |Rating: 0 0 |Link to Comment |View article
  • The Self-Defeating Oil Surge
    The article is most likely directionally correct. I would add that although solar has its place in the future--wind, wave, biofuels, advanced batteries, natural gas, liquified coal, nuclear, and other energy sources will also be good investments.

    Investors should not make the mistake of concentrating on only one answer--one size (solution) does not fit all (needs).
    May 25 08:43 am |Rating: 0 0 |Link to Comment |View article
  • Asia Tries to Prick the Petroleum Bubble
    It's still (Friday) morning, oil prices are still up about 1.5%.

    I would not be surprised to see it close lower, as many longs won't want to go into our 3-day weekend long in a bubble.

    You know the bubble is about to burst when the oil stocks go down even as the commodity goes up.
    May 23 11:33 am |Rating: 0 0 |Link to Comment |View article
  • Oil Price Chart Since 1990
    $134+ tonight--The bubble will soon burst! (And if you doubt it, just notice that the various oil stocks are falling in the face of rising barrel prices.)

    So oil falls to $110...$100...$90.

    It won't be long before oil starts up again; it's still about supply and demand; and unfortunately, only demand is rising.

    Interesting story in today's WSJ on synthetic oil and the Air Force taking the lead in testing. As it is profitable at $55/barrel, let's get going on commercial production.
    May 21 20:04 pm |Rating: 0 0 |Link to Comment |View article
  • Crude Oil: Congress Acts, Iran Hoards, RTX Soars
    I think I'll stay out of this one...not much left to say among the noise anyway.
    May 16 11:20 am |Rating: 0 0 |Link to Comment |View article
  • The New Peak Oil: Peak Demand
    This topic has already been well covered...and Mr. Saxena has provided an excellent thought-provoking article.

    Therefore, the only thought I wish to add (and I have not seen this elsewhere) is that with the economies of Iran and Venezuela being (a) nearly totalitarian, (b) being "unfriendly" to the largest users of oil, and (c) being strongly dependent on oil revenues to support social programs and keep their populations from revolting, it seems to me they will do everything in their power (and it doesn't take much) to keep the price of oil as high as they can--and make it go higher when they like...

    For example, in addition to their considerable influence and voting power within OPEC, they can keep oil priced above any fundamental value.

    But more importantly, it seems to me that when spot oil drops a few dollars, it would be a simple thing to send a couple speedboats to cause an incident in the Straits of Hormuz...or to blow up a pipeline in Iraq...or to fund or encourage an attack on oil facilities in Nigeria...or to destabilize any of several Middle East countries (which raises oil's terror premium).

    I'm not claiming a specific conspiracy...but I do think it has (or will) occured to them that they have the means to keep the price of oil high.
    May 14 13:19 pm |Rating: 0 0 |Link to Comment |View article
  • Energy Sector Is Approaching Negative Seasonality
    I think Babak has something to say...and I appreciate new info, so I will add it to the mix.
    May 13 09:53 am |Rating: 0 0 |Link to Comment |View article
  • Parabolic Move In Crude Oil Looks Extended
    Mr. Sczech:
    So, you believe in Peak Oil...OK, maybe it is the case...however:

    Isn't it true that just a year ago, there was no giant oil field off the coast of Brazil, but now there are two giant fields. (same applies to the new field in the southern Gulf of Mexico).

    No one knows how much oil is yet to be found in waters much deeper than we had the technology to find just a couple years ago. Also, at $80, 90, $100/barrel, it is now economical to look in places we did not look before. Technology marches on.

    Therefore, I for one, don't think you can be so certain when the oil will be gone.
    May 12 19:11 pm |Rating: 0 0 |Link to Comment |View article
  • Parabolic Move In Crude Oil Looks Extended
    OK, I agree crude is due for a pull-back.

    The issue is really (a) how far?; and (b) for how long before it resumes its upward climb?

    A pull-back would be welcome; a lot of folks are being hurt by shifting income to fuel from other needs.

    But it they think gasoline is going back to $2/gal., or that it gas will fall to $2.50 and stay there for a year; I think they are going to be disappointed. Gas at $5+/gal. is on the horizon...6 months, 1 yr?, 2 yrs?

    The same can be said for a the commodities and materials.
    May 12 08:22 am |Rating: 0 0 |Link to Comment |View article

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