Oil Prices

Quote from jasonbraswell:

Why do you say seasonality points down? I track seasonality, too, and I see the first opportunity for a seasonal decline in oil to be Oct to Nov.

Of course, different methodologies will yield different results, I'm just curious as to how yours works.

Thanks.
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I agree with you, inventories go up (and prices come down) around October most of the time, although, a bad year tends to shorten the summer leg, bringing inventories of crude to satisfactory levels somewhat sooner.

Take a look at the 2001 year for crude inventory levels, and you will see my point.

I see the world economy starting to cool off ever since November 04. Shipping tariffs, transportation growth, inventory buildups in the GDP say so.

Last 3.4% GDP was made up of 2.3% sales of inventories... Which signals a big production stall. It's picking up, but my instincts tell me, there's something awfully wrong going on these quite waters...

If you add the fact that the chinese revalued their Yuan. Without many details, a lot of other central banks have started to unload themselves from US dollars, to balance their basket, to take a breather, the Yuan had them cornered, whatever...

This means interest rates should go up, but they can't!! If they do, the whole deck of cards comes tumbling down.

To sum, things are not as rosy as they seem to be, they are worsening and could get catastrophically worser...

But I'll make sure before I go short oil.
 
Quote from traderlivermore:

I agree with you, inventories go up (and prices come down) around October most of the time, although, a bad year tends to shorten the summer leg, bringing inventories of crude to satisfactory levels somewhat sooner.

Take a look at the 2001 year for crude inventory levels, and you will see my point.
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I see that they topped out in June. By "bad year", do you mean lagging inventory levels?
 
There’s new demand for oil from emerging economies that require oil. Period. Go off on Bush and Iraq as you may.

You have to separate refined gasoline prices from the price of light sweet crude oil. They are two very different things. Their correlation is based on geopolitics and the relative degree of ruthlessness between nations, in terms of getting the sweet light sweet crude deals.
 
From the EIA report, I find the first 2 lines under Crude Oil Stock very interesting.

In essence, although crude oil stocks are up 9.7%, yr to yr, total motor gasoline output is down 3.7%.

Could it be that the quality of the crude is such, --lower, that this crude is yielding less gasoline?

It could simply be a refining issue, too much to process, there is a delay. But if not...

Anybody want to comment?

http://www.eia.doe.gov/pub/oil_gas/..._petroleum_status_report/current/txt/wpsr.txt
 
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