Cramer says $125, Jim Jubak says $180!!!!!

sss.........the guys name is matthew simmons..................a real tine confirmed bastard not in my wildest dream do i ever believe some one will come out aand say something like that
 
Quote from ShoeshineBoy:

I never understood this argument: with futures you always have someone on both sides of the trade...
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And so if I want to buy a long contract, and there are no sellers/shorts the market moves up until someone thinks it's overvalued
 
Quote from piezoe:

It's relatively simple. If you're speculating that crude is going to go higher you sell a contract to deliver in the future at a higher price. In that case you better buy some oil at the current spot price and store it so you can meet your obligation to deliver. Of course this kind of speculation causes production to be stored, and thus removed from the current market, helping to drive price higher, or so you hope. When the contract subsequently changes hands it still, supposedly, is backed by an underlying tank of crude somewhere.
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wouldnt this be hedging a long position in the cash market? thats not really speculating at all, and the opposite of what everyone on ET does...
 
Quote from S2007S:

Oil now reminds me of the days of the dot com when they were sticking $1000 price tags on stocks worth no more than maybe $50 bucks, well it seems that price targets for oil are just running wild at the moment which to me is saying there is a top in oil not to far away, well maybe a correction of 20% or more. Funny how all these price targets come about after the fact oil has run up over 800% in about 10 years...its getting really funny now, everyday oil spikes a little higher sending prices at the pump to all time records, it can only last so long before the consumer eventually does grow tired of paying just a tad too much at the pump, people were crying when oil touched $3 at the pump well $4 is here and soon maybe $5.00. Consumers are probably wondering when something will be done to keep the steady rise of oil under control, who knows but a correction is coming for oil, a big one.....




Why oil could hit $180 a barrel

Just when crude is becoming more costly to extract and process, producers in three key countries are short of cash. And without that money, recent finds won't do much good.

By Jim Jubak

Yikes! Oil at $117 a barrel. It has to go down from here, right?

Wrong. In the short term -- say, the next two years or so -- we're looking at bad news about global oil supply that could take the price of a barrel of crude to $180.

Needless to say, today's $3.50-a-gallon gasoline would look cheap if oil prices hit $180 a barrel. At that price for a barrel of oil, gasoline would cost somewhere north of $5.50 a gallon.

The good news is that's about the price, experts now say, that would send global consumption tumbling and oil prices into retreat, as drivers scrambled to find ways to conserve.

Of course, experts once thought $3-a-gallon gasoline would lead to a drop in consumption. The latest forecast from the International Energy Agency calls for global oil demand of 87.2 million barrels a day this year. That would be an increase in consumption of 1.3 million barrels a day from 2007 -- despite a U.S. economic slowdown and soaring oil prices.

So why do I think oil prices will keep climbing for two more years at least?

A terrible coincidence of geology and geopolitics. Just when oil is getting more expensive to produce, the oil industries in three key countries -- Mexico, Russia and Nigeria -- find themselves short of cash. And without that cash, oil production in these countries, and global oil production in general, is headed into a decline.

The Russian oil industry, for example, announced that production had fallen 1% in the first quarter of 2008. According to the Russian energy ministry, oil production for the full year could be lower than in 2007.

Any decline would mark a huge turnaround. Russian production has grown steadily over the past 10 years, and in its supply-and-demand projections the International Energy Agency has been counting on growth in Russian production of 5% by 2012 to offset big declines in older fields in the North Sea and Mexico.



Continued here:


http://articles.moneycentral.msn.com/Investing/JubaksJournal/WhyOilCouldHit180DollarsABarrel.aspx
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And yet another "cut and paste" post by our resident "Gloom & Doomer" on ET, S2007S . . .
Why am I not surprised.

:D
 
Quote from Triple X:

Speculation is what is driving this, and the dollar collapse. The CEO of Exxon and Saudi Oil ministers have both blamed speculation for this runup. It is the hedgefunds and pension funds doing this.

There was an article in NY Times today about how speculation in Ag futures by big money is like a "tidal wave" and they are actually buying more contracts than there is physical product! Farmers are actually buying private insurance instead of using futures contracts to hedge. I think the same thing is happening here, big money is buying oil futures contracts.
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Excellent point.
People forget that there is now $184 BILLION DOLLARS in managed futures trading.
This is a huge number compared to just 10 years ago . . .
 
Quote from Triple X:

Speculation is what is driving this, and the dollar collapse. The CEO of Exxon and Saudi Oil ministers have both blamed speculation for this runup. It is the hedgefunds and pension funds doing this.

There was an article in NY Times today about how speculation in Ag futures by big money is like a "tidal wave" and they are actually buying more contracts than there is physical product! Farmers are actually buying private insurance instead of using futures contracts to hedge. I think the same thing is happening here, big money is buying oil futures contracts.
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That is another way to describe the principle behind a Ponzi Scheme. Ponzi is not mentioned as it does not look good, but the force that makes it work or collapse is the same. And yes one can make good money, one just have to make sure that one is not standing up when the music stops (hoding an empty bag).
 
All this talk about oil bullish predictions by all the monkeys out there tells me that we may be at or close to the top. I have to start look at the oil chart to get ready for the downside. That is where the real money will be made (on the down move).
 
I used to look for oil and remember the industry getting crushed in a 1981 oil glut. At that time oil prices increased to the point where it made economic sense to go find and produce oil. Eventually enough production capacity built up that prices crashed and many geotechnical firms went out of business including the one I worked for.

Yeah, we get screwed in the meantime but there is a self-corrective mechanism unless, of course, the demand-abatement part of that 1981 scenario is negated by the increasing demand of China and India. If so, we are screwed. :D

I paid 4.29 for diesel yesterday. I'm parking my truck and driving the Carrera for awhile lol.
 
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