20 reasons why Oil to NEVER hit $135.00 again...dated: May 22, 2008
- Thread starter increasenow
- Start date
With Bernanke as the fed head?
You give him way too much credit.
Something is recalling, the number 39, whereas $39.50 (April 1980) vs $139.22 (June 2008)???????
Article from New York Times (Published: March 4, 2008):
Capping a relentless rise in recent years, oil prices hit a record high during the day on Monday, then pulled back to close below the record.
The dayâs highest trading price, $103.95 a barrel on the New York Mercantile Exchange, broke the record set in April 1980 during the second oil shock. That price, $39.50 a barrel, equals $103.76 today, when adjusted for inflation.
Read more...
Article from New York Times (Published: March 4, 2008):
Capping a relentless rise in recent years, oil prices hit a record high during the day on Monday, then pulled back to close below the record.
The dayâs highest trading price, $103.95 a barrel on the New York Mercantile Exchange, broke the record set in April 1980 during the second oil shock. That price, $39.50 a barrel, equals $103.76 today, when adjusted for inflation.
Read more...
This rampant speculation is out of control and high crude oil prices obviously has great consequences on the economy... This is not soybeans we're talking about.
Anyone heard any significant news from Congress? I know there were formal talks last week but it merely appeared as meriting a "publicity stunt".
Also, are there any realistic policies that may halt the speculation? Is it viable for the Fed to raise interest rates in hope of strengthening the dollar? I know the trade deficit can't artifically be improved, but something has to give.
I wish it were possible for the government to "short" oil and squeeze all those speculators. Problem is, however, that the government (at least Bush administration) actually likes high prices considering how invested those neo-cons are in oil and defense contractors.
Anyone heard any significant news from Congress? I know there were formal talks last week but it merely appeared as meriting a "publicity stunt".
Also, are there any realistic policies that may halt the speculation? Is it viable for the Fed to raise interest rates in hope of strengthening the dollar? I know the trade deficit can't artifically be improved, but something has to give.
I wish it were possible for the government to "short" oil and squeeze all those speculators. Problem is, however, that the government (at least Bush administration) actually likes high prices considering how invested those neo-cons are in oil and defense contractors.
monty21,
At least you recognize it for what it is, speculation; it is amazing how many believe that what is only a market related price is set by fundamentals and high probability expectations.
'Market related' means that the modern oil price regime is one of formula pricing in which multiple grades of crude oils are set +/- in reference to a few (3) benchmark crudes which prices are not determined by supply/demand but by financial markets.
One can argue that financial markets efficiently capture present and future realities, which is also to argue the impossibility of bubbles. But heck, since we know very well that bubbles form, the efficient market type arguments fall on their face.
What could Congress do?
Sit on its thumbs until this bubble pops*, and then attempt to take credit for the drop.
More seriously, it could put end to the swaps dealers position limit exemption which has allowed long only index funds to pour in since particularly late 2003. Alongside this, force these funds back into normal limits.
It could try to end the inter-market trade, aka Enron Loophole, which it only pretended to do with the attachment to the recent Farm Bill.
It could rewrite the Commodity Futures Modernization Act of 2000, which both of the above are related too.
It could take a very close and public look into the activities of Goldman, Morgan Stanley, Barclays, et al. A strong light would, I believe, expose, well, more than most might want to see.
*(a popping that will itself have negative consequences for oil exporting nations and, possibly, U.S. credit markets. That is, a price drop back into the range some old oil hands think reasonable would not be an unmitigated plus)
At least you recognize it for what it is, speculation; it is amazing how many believe that what is only a market related price is set by fundamentals and high probability expectations.
'Market related' means that the modern oil price regime is one of formula pricing in which multiple grades of crude oils are set +/- in reference to a few (3) benchmark crudes which prices are not determined by supply/demand but by financial markets.
One can argue that financial markets efficiently capture present and future realities, which is also to argue the impossibility of bubbles. But heck, since we know very well that bubbles form, the efficient market type arguments fall on their face.
What could Congress do?
Sit on its thumbs until this bubble pops*, and then attempt to take credit for the drop.
More seriously, it could put end to the swaps dealers position limit exemption which has allowed long only index funds to pour in since particularly late 2003. Alongside this, force these funds back into normal limits.
It could try to end the inter-market trade, aka Enron Loophole, which it only pretended to do with the attachment to the recent Farm Bill.
It could rewrite the Commodity Futures Modernization Act of 2000, which both of the above are related too.
It could take a very close and public look into the activities of Goldman, Morgan Stanley, Barclays, et al. A strong light would, I believe, expose, well, more than most might want to see.
*(a popping that will itself have negative consequences for oil exporting nations and, possibly, U.S. credit markets. That is, a price drop back into the range some old oil hands think reasonable would not be an unmitigated plus)
A calm look at the end of this week and you may possibly get a sense of balance. The range today was 634; from time to time in the last 18 months there are big ranges out at 4 to 6 bucks for the day. Of course those with overnight or longer 'short' positions were getting their peckers further chewed up in the 'bull' mincer today.
Remember, the best play is intraday, open to close. Just play the gyrations. So looking at the pattern for today (June 6, 2008), the session's gyrations (up/down repeating) today produced 47 micro gyrational 'legs' of minimum 15 points (bar close to bar close) and 15 macro 'legs' of minimum 45 points (ie cents). The mean average of those 15 'legs' was 128 points per 'leg'. Therefore between 10am and 2.30pm more than 1900 points were on offer to all CL players.
Remember, the best play is intraday, open to close. Just play the gyrations. So looking at the pattern for today (June 6, 2008), the session's gyrations (up/down repeating) today produced 47 micro gyrational 'legs' of minimum 15 points (bar close to bar close) and 15 macro 'legs' of minimum 45 points (ie cents). The mean average of those 15 'legs' was 128 points per 'leg'. Therefore between 10am and 2.30pm more than 1900 points were on offer to all CL players.