Oil Run up

Quote from limitdown:

its remarkable that this statement (so as not to be insulting or question you) has the premise that this is a supply / demand issue, as its being handed to the public on the CNBC / BiTV, CNN HN, etc. news media....

its remarkable that all the congressional testimony and even oil industry sources which challenge these lies and notions that the justification of the commodity / oil prices are supply / demand related....

its remarkable that even the Saudi Oil Ministers who have publically said that world demand (and they have all the credibility over a, say, Boone Pickens and Dubbya Bush II types) is []bnot what is being portrayed in the media, and they are meeting it as a member and OPEC and non-OPEC countries, hence, another nail in the coffin of the false supply / demand arguement....

its remarkable with all these other threads on ET, and other sources, and most importantly links to other industry articles as further proof, one can then choose to be ignorant or simply ignore these more credible sources, since you or someone else might argue with me calling these sources "facts", I used the more moderate term "more credible sources"...

its simply remarkable.... [/B]
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I think you misunderstood me, I think the oil price is not justified by demand.
 
Quote from Cutten:

It's nonsense if you are flat, or - worse still - short. If you are long, it's this year's Maserati.
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I hope it is this years maserati, because that makes me feel so much better. Maseratis are garbage. they're good for about 10k miles and then they're worth about as much as a Kia. Thanks! put a smile on my face!
 
Quote from spidey:

I think you misunderstood me, I think the oil price is not justified by demand.
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agreed,

its now more obvious to more people, that what has been done (relatively) in the dark, is now in the light and front center in peoples minds....

they screwed the pooch so much, they broke it today, and the -413 DJIA was proof,

action is going to be swift, severe and significant over the weekend, or the remaining world markets will plummet too because of the simple fact that the US (any remainind breathing sector, whether Congress, Govenors or other regulators that can take a loud public presense on the world markets) has not acted.

Geo Bush II is out to lunch. The markets waited and paused all the way up to the 1:49pm EST hour awaiting his much heralded speech at 1:50pm, and all he did was announce some labor secretary appointment. The markets promptly took away another 80 points from the DJIA being down roughly -334 at that time, until the close at -440 and a settle of -413 range.

he is out to lunch.....

got any hand baskets cause we ain't goin there,

weeze already there and going beyond it
 
Quote from Cutten:

It didn't collapse last year at $99 - went down about 13%, then ranged, then blew through $100 to new highs.

We already had a correction from $134+ to $121 in the last week or so. Then in 2 days that whole decline got erased, and we move limit up to new all-time highs on massive volume with the biggest price advance since the *first* Gulf War. That looks like pretty bullish action to me.

Really, if you are shorting here, I have to ask what it would take to make you get long. A strike on Tehran by Israel, followed up by a US land invasion of Iran, announcement of a $1 trillion purchase by the strategic petroleum reserve, and China announcing it needs another million barrels a day for its energy needs? Funnily enough, I think if ALL those things happened, you would STILL be thinking up reasons to short crude.
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We haven't had anything approaching a blowoff top as of recent.

Here is some support for my point about blowoff tops being indeed shortable. For recent history:

For data: http://tonto.eia.doe.gov/dnav/pet/hist/rwtcd.htm

- Gulf War I: Beginning Aug 1990, iraq invasion. $20 -> $29 in 5 trading days. Thats a 45% move. Dwarfs this one. Crude corrected about 15% to $25 before moving up to $40. Within 5 months (February), price was back to $20.

- Hurricane Katrina: August 29th or so, 2005. Oil peaked that day around $70. That was the day to short.

- Gulf War II: March 19th 2003 was the invasion date. Oil crashed down (classic sell the news) once the invasion was confirmed from $37 to $27 the following week! 27% drop in price. Price stabilized around $30 thereafter.

Now for a look a little further back to the 1973 and 1979 oil crises:

http://en.wikipedia.org/wiki/Image:Oil_Prices_1861_2007.svg

Both price spikes did not witness continued acceleration in price. In fact, the second spike witnessed a price collapse that soon followed.


I agree peak oil and supply issues are something definitely not to ignore, and have put much thought into it. But trading it is another matter. This gradual and until now orderly price ascent in crude has very real world ramifications, and demand destruction is beginning to set it.

I am not outright short (nor do I admit to having balls that large to do so). I am merely in USO and CL puts and stand to lose a fixed amount if I am wrong. But if Israel does indeed bomb Iran over the weekend, and Iran retaliates by blocking the strait of Hormuz, I recommend *anyone* buying long dated USO/CL at open puts if crude trades at $200+. Those prices are not sustainable; I don't care if 15 million barrels/day are blocked from market. Rationing and price control forces will set in to cap this thing (as our policymakers have clearly shown a lack of ability to learn from past follies).

2 very recent articles of mine touch on this:

http://scriabinop23.blogspot.com/2008/06/ecb-missing-point-with-crude.html

http://scriabinop23.blogspot.com/2008/05/crude-oil-on-direction-and-equity.html
 
Again today (June 6) short covering dominated CL. After bottoming in the first hour the undertone of persistent buying, so evident yesterday, remained evident and carried on throughout today. Plenty of points were there to take from the sequential downswings/upswings.

Check just how the mo-fo went through the session today (10am -2.30pm); down 136, up 206, down 91,up 280, down 79, up 186, down 146, up 83, down 79, up 100, down 75, up 185, down 70, up 134, down 74.

".. ah bubbling crude.. oil that is .. black gold .. Texas tea"
:cool:
 
Quote from Cutten:

Yes, I'm still holding my long position. I don't see why you'd want to gamble intraday when you can sit on your hands and profit from the strongest bull market of the year.
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How is day trading any more of a gamble than taking a position?

I've never understood this line of thinking, which is why I've been a day trader for over 20 years.
 
I love all the bullshit excuses that people are using to blame for the run up

'people are worried'
'inflation fears'
'Iran'
'crude supplies are low'


why can't people tell the truth. its gonna take someone to get into alot of trouble before the reality appears.
 
Does the fact that oil is finite mean that it can be different this time?

In spite of the supply demand issues I still think the price of crude oil is mainly driven by the war in Iraq and the possibility of further conflict in the Middle East.

There were 3 news items on Friday, Morgan Stanley predicting $150 crude by July 4, the U.S. jobs report, and Israel stating they would take military action against Iran if they don't stop their nuclear program.

We have seen numerous oil price predictions and economic reports before that did not move the oil market that much.

However the threat of further conflict in the Middle East and we get a + $10.00 move in crude oil in one day.

This also begs the hard question for Congress and the Bush administration as they point fingers at speculators and oil executives, did the invasion of Iraq cause this unprecedented bull run in crude oil?

http://tradingcrude.blogspot.com/
 
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