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Oil bubble
- Thread starter cakulev
- Start date
Quote from kubilai:
The U.S. did pretty well surviving the 1970s oil shock, I see no reason it should fail on the current one.
I guess this gets back to the question of whether this is a temporary crisis like the 70s, or the beginning of the end of abundant oil. And, I can't answer that question either.
We can just agree to disagree on that point.
Sounds good. It was an interesting discussion, I learned from it and I appreciate your taking the time.
Martin
You've got opec controlling approximatly 40 percent of the worlds production.. All opec has to do is sneeze and the price is going to react one way or the other.. The USA can't afford to slow down it's usage since our enconomy revolves around it.. But it's not just our problem the escalating prices effect the entire world..
Our other problem is getting it to market from our refinaries which are opporating at near full capacities... So there's obviously an imbalance or rather razor thin margins without alot of availble fuel on the sideline.. Nothing to sit comfortable in your
easychair and believe there's no problem with the situation..
Feel free to correct me where I'm wrong..
Our other problem is getting it to market from our refinaries which are opporating at near full capacities... So there's obviously an imbalance or rather razor thin margins without alot of availble fuel on the sideline.. Nothing to sit comfortable in your
easychair and believe there's no problem with the situation..
Feel free to correct me where I'm wrong..
Daniel Yergin writes that there will be a large, unprecedented buildup of oil supply during the next few years as capacity rises 20%.
http://www.washingtonpost.com/wp-dyn/content/article/2005/07/29/AR2005072901672.html
http://www.washingtonpost.com/wp-dyn/content/article/2005/07/29/AR2005072901672.html
Many posts here focus on current US petroleum inventories. Both big and small specs have been completely ignoring current supply and inventories for well over a year now. No one cares about present conditions anymore because Saudi Arabia over the last year has hit their production limit.
Up till about two years ago, Saudi had about three million barrells of spare capacity. Saudi played the role of swing producer: when inventories seemed to Saudi to be growing, Saudi cut production, and when inventories seemed too low--particularly going into the peak demand fourth quarter--Saudi raised production. Specs traded on these Saudi inventory assessments: Saudi crude is long haul and takes 6-8 weeks to reach the US gulf: if Saudi raised or cut too much, inventory levels would increase or decrease for about two months. Two months' inventory builds or draw downs could cause fears of gluts or shortages.
Over the last year, world crude demand has greatly increased with no increase in world crude capacity. As a result, Saudi has been pumping at full capacity. Notice crude specs no longer hang on every word from the Saudi oil minister: the Saudis are going to pump at full capacity under any current conditions, so Saudis really make no decisions on their crude supply.
This winter will be the first in the history of crude oil where world demand will exceed not just wolrd supply but also world capacity. Crude big spec knows this and they are going long not just the active front months but also even CLZ10. That this year's crude conditions are the first ever necessarily means crude prices will move in ways never seen before.
Up till about two years ago, Saudi had about three million barrells of spare capacity. Saudi played the role of swing producer: when inventories seemed to Saudi to be growing, Saudi cut production, and when inventories seemed too low--particularly going into the peak demand fourth quarter--Saudi raised production. Specs traded on these Saudi inventory assessments: Saudi crude is long haul and takes 6-8 weeks to reach the US gulf: if Saudi raised or cut too much, inventory levels would increase or decrease for about two months. Two months' inventory builds or draw downs could cause fears of gluts or shortages.
Over the last year, world crude demand has greatly increased with no increase in world crude capacity. As a result, Saudi has been pumping at full capacity. Notice crude specs no longer hang on every word from the Saudi oil minister: the Saudis are going to pump at full capacity under any current conditions, so Saudis really make no decisions on their crude supply.
This winter will be the first in the history of crude oil where world demand will exceed not just wolrd supply but also world capacity. Crude big spec knows this and they are going long not just the active front months but also even CLZ10. That this year's crude conditions are the first ever necessarily means crude prices will move in ways never seen before.
Quote from cakulev:
Daniel Yergin writes that there will be a large, unprecedented buildup of oil supply during the next few years as capacity rises 20%.
http://www.washingtonpost.com/wp-dyn/content/article/2005/07/29/AR2005072901672.html
Never a bad idea lending an ear to Yergin, but can long can your QM shorts hold out?
It seems the price is going up because someone want it to go up. It goes up on speculation, and when the speculation is not happening then it goes down a little.... Only to come back up on other speculations.
The total consumption of energy in world is not only based on oil. At certain oil prices you get alternative energies that will be profitable to use instead of oil. In addition you have enormous oil reserves in Russia which is profitable to take out in 80s I think the analysis said. So oil prices has a roof.
The biggest problem soon for oil prices will be politicians. Soon the importers of oil will most likely start to tax oil higher and subsidise other energy sources so as to limit huge trade deficits. If man is too dependant on one limited resource you need to change it.
ORM
The total consumption of energy in world is not only based on oil. At certain oil prices you get alternative energies that will be profitable to use instead of oil. In addition you have enormous oil reserves in Russia which is profitable to take out in 80s I think the analysis said. So oil prices has a roof.
The biggest problem soon for oil prices will be politicians. Soon the importers of oil will most likely start to tax oil higher and subsidise other energy sources so as to limit huge trade deficits. If man is too dependant on one limited resource you need to change it.
ORM
Quote from energytraderus:
Many posts here focus on current US petroleum inventories. Both big and small specs have been completely ignoring current supply and inventories for well over a year now. No one cares about present conditions anymore because Saudi Arabia over the last year has hit their production limit.
Up till about two years ago, Saudi had about three million barrells of spare capacity. Saudi played the role of swing producer: when inventories seemed to Saudi to be growing, Saudi cut production, and when inventories seemed too low--particularly going into the peak demand fourth quarter--Saudi raised production. Specs traded on these Saudi inventory assessments: Saudi crude is long haul and takes 6-8 weeks to reach the US gulf: if Saudi raised or cut too much, inventory levels would increase or decrease for about two months. Two months' inventory builds or draw downs could cause fears of gluts or shortages.
Over the last year, world crude demand has greatly increased with no increase in world crude capacity. As a result, Saudi has been pumping at full capacity. Notice crude specs no longer hang on every word from the Saudi oil minister: the Saudis are going to pump at full capacity under any current conditions, so Saudis really make no decisions on their crude supply.
This winter will be the first in the history of crude oil where world demand will exceed not just wolrd supply but also world capacity. Crude big spec knows this and they are going long not just the active front months but also even CLZ10. That this year's crude conditions are the first ever necessarily means crude prices will move in ways never seen before.
The problem with that analysis is that it doesnt count for fields that is getting profitable because of the oil price rise.
By saying this tho I dont say dont go long oil.. By all means.. It seems they want to create another hype now.
ORM