The best one I ever heard on this is:
The market can remain irrational longer than you can remain solvent.
Enough said!
The market can remain irrational longer than you can remain solvent.
Enough said!
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Crude bounce.....
- Thread starter patbateman
- Start date
Does crude hit 76 tomorrow? The inventory number should be interesting.
i just dont see any reason why it wouldnt, all the risk is to the upside. There are way too many geopolitical factors, as usual, to push this through 75.35.
Quote from Aaron:
They say stocks climb a wall of worry. It seems oil also climbs a wall of worry. It sounds like the same thing, but one is a contrarian kind of thing and the other is a fear kind of thing. Where's the logic?
The logic is that price will continue to rise, oscillation by oscillation . . . till it reverses. The reversal is in the oscillations.
Oil inventories are going to be up tomorrow at multi-year highs. Sounds like all this supply would drive down prices, but here's what's going on...
If you were afraid your local gas stations were going to run out of gas, what would you do? You'd hurry up and go fill up your tank and as soon as it got down to 3/4ths full, you'd top it off again. Same thing for the refiners -- they're afraid the supply from Iran is going to get cut off, so they hurry up and fill up their tanks with oil and keep them full. They operate "off the top of their tanks".
Some would call it "stock piling", some would call it "hoarding", but in any case, carrying a larger inventory of oil in the face of uncertain supply is a wise choice for the individual.
The high oil inventories reported tomorrow aren't going to drive the price down. The price of oil is getting led around by the nose by the price of gasoline. Oil will follow gas and gas will rise or fall depending on inventories and demand destruction.
The three numbers I'll be looking at are the change in gasoline investories, the refinery capacity utliization change from last week, and the gasoline demand compared with a year ago.
Aaron Schindler
Schindler Trading
If you were afraid your local gas stations were going to run out of gas, what would you do? You'd hurry up and go fill up your tank and as soon as it got down to 3/4ths full, you'd top it off again. Same thing for the refiners -- they're afraid the supply from Iran is going to get cut off, so they hurry up and fill up their tanks with oil and keep them full. They operate "off the top of their tanks".
Some would call it "stock piling", some would call it "hoarding", but in any case, carrying a larger inventory of oil in the face of uncertain supply is a wise choice for the individual.
The high oil inventories reported tomorrow aren't going to drive the price down. The price of oil is getting led around by the nose by the price of gasoline. Oil will follow gas and gas will rise or fall depending on inventories and demand destruction.
The three numbers I'll be looking at are the change in gasoline investories, the refinery capacity utliization change from last week, and the gasoline demand compared with a year ago.
Aaron Schindler
Schindler Trading
Quote from Aaron:
The high oil inventories reported tomorrow aren't going to drive the price down. The price of oil is getting led around by the nose by the price of gasoline. Oil will follow gas and gas will rise or fall depending on inventories and demand destruction.
Aaron Schindler
Schindler Trading
This is exactly how it works. However, the inventory of gas really isn't that important (at this point). The key is how the oil companies pass the cost of crude on to consumers (Americans). Crude will continue to be high so long as consumers offset the cost for the oil companies. You want to see oil crash? Start a price war amongst the oil companies. Make them fight for consumer dollars. This has been mentioned several times by many people to boycott purchasing gas from the biggest gas producers (exxon). If exxon is not receiving dollars for its gas to cover the cost of increasing its crude inventory it will be forced to lower price until the consumers kick in again. As soon as somebody starts to cut their price of gas and others follow. Oil will crater big time as the oil companies will fear for not being able to collect a sufficient amount of cash to cover their purchases of expensive crude. They will then be battling for dollars to cover big costs and trying to win over consumers with lower prices. Thus, causing them to stop building inventory.
Gas prices will fall eventually...they will fall very very hard when what I just mentioned above takes place. But there has got to be some way to instigate a price war.