Kudos to MMs

Quote from shortie:

Peak Oil
More...
I agree, but that is only partly so. I believe it is a strange dynamic:

http://www.treehugger.com/files/201...il-prices-to-keep-alternative-energy-down.php

Imo, the price of gold cannot be $1400 and oil at, $100? What? On what planet is this true? Every other commodity, including a shinny yellow metal, except oil is at all time highs, but not ___THE___ commodity without which the entire world comes to a grinding halt? I don't understand. Doesn't mean there is some logic that would explain it, it just escapes me...
 
Quote from nitro:

Good point. In those days, we were just beginning to realize, or at least I became conscious of, the fact that oil was not in endless supply.

I think you misunderstand though, I am saying that the price is being kept ___LOW___ on purpose by the cartel, not high!
More...

You do know that that the "cartel", or the seven sisters as they are known, make up only 10% of the market? They have no such power to hold prices low or high.
 
Quote from Maverick74:

You do know that that the "cartel", or the seven sisters as they are known, make up only 10% of the market? They have no such power to hold prices low or high.
More...
See the above link. I am not convinced they can make it go higher, but they sure can control to make it go lower. That is true almost by definition since they produce the raw material. I bet you they are having meetings up the wazoo on trying to figure out how to ramp up production and flood the market with it to keep prices low, but these people can barely stand each other and would probably slit each others throats were it not for their common treasure...

Besides, the logic of gold at $1400 and every other commodity except oil, at $100 is not explained...
 
Quote from nitro:

See the above link. I am not convinced they can make it go higher, but they sure can control to make it go lower. That is true almost by definition. I bet you they are having meetings up the wazoo on trying to figure out how to ramp up production and flood the market with it to keep prices low, but these people can barely stand each other and would probably slit each others throats were it not for their common...
More...

Nitro, I'm getting the impression here you have very little knowledge of the oil market. Just a hunch. Do you understand that oil is in pretty steep contango right now? The ships are loaded to the hilt of oil. Storage facilities are filled to the brim. There is nothing they can do to force more oil into storage.
 
oil at higher prices makes the cost of alternatives and the r & d to bring them out much more attractive, lower oil prices stave off the alternative fuels, i think base cost of shale oil is appx 70 per barrel to turn it into oil product,just one example
 
Quote from Maverick74:

Nitro, I'm getting the impression here you have very little knowledge of the oil market. Just a hunch. Do you understand that oil is in pretty steep contango right now? The ships are loaded to the hilt of oil. Storage facilities are filled to the brim. There is nothing they can do to force more oil into storage.
More...
I understand contango and backwardation. I don't understand the __RELATIVE__ values of the commodities. Why is oil nowhere near record highs, with every other commodity nearly bar none, at all time highs? And worse, every other commodity is relatively easy to manage since you don't have to deal with savages and drill five miles for it.

Nope, not convinced. I maintain, oil at $100 too cheap. Why isn't it more expensive? I don't know!
 
Quote from nitro:

I understand contango and backwardation. I don't understand the __RELATIVE__ values of the commodities. Why is oil nowhere near record highs, with every other commodity nearly bar none, at all time highs? And worse, every other commodity is relatively easy to manage since you don't have to deal with savages and drill five miles for it.

Nope, not convinced. I maintain, oil is $100 too cheap. Why isn't it more expensive? I don't know!
More...

Because there is 1000 times more oil in the world then Corn! That's why. You can store oil forever. You can't store food forever. There is a limited amount of land and crop. If crops are destroyed due to weather, etc then you can't just go to Walmart and pick some up. you have to wait for the next crop. Do you have any idea how much demand there is in India, China and South America for these commodities?
 
Quote from Maverick74:

Because there is 1000 times more oil in the world then Corn! That's why. You can store oil forever. You can't store food forever. There is a limited amount of land and crop. If crops are destroyed due to weather, etc then you can't just go to Walmart and pick some up. you have to wait for the next crop. Do you have any idea how much demand there is in India, China and South America for these commodities?
More...
That is not an explanation. For example, it doesn't explain the price of gold and silver and a host of other non-critical commodities. In fact, oil is the only commodity at this price that has no replacement, capice?
 
Quote from nitro:

That is not an explanation. For example, it doesn't explain the price of gold and silver and a host of other non-critical commodities. In fact, oil is the only commodity at this price that has no replacement, capice?
More...

No, not capice. Nitro, do you realize that we can take all the Gold in the entire world, all the Gold that has been mined from 2000 BC to the present and fill up two olympic size swimming pools with it. That's it! That's all there is. Two swimming pools for everyone in the world! All the world banks, all the world governments, everyone...two swimming pools! That's it. When you have such a finite supply and strong demand, then yes, price can go much higher. No such supply restraints exist for oil. Try again my friend. Maybe you should use a lifeline or call a friend.
 
Model says "FV" (but with some values backed out as explained in the "Dark Matter" post) is 1303.07. With the values as they actually are, 1252.00.

FWIW.
 
You must log in or register to reply here.
Back
Top