The Truth About Commodities, including Oil - Complete Speculation

I am with BuyLoSellHi.

Why? Because so many people came out against him in the first few pages. This is just another good example of the ET contrarian indicator: if all you guys think the market has topped, go long (and vice versa).

My god. You are the weakest link!
 
Quote from ByLoSellHi:

The CEOs of the largest oil companies have testified under oath that the equilibrium price of oil should be between $50 and $60 per barrel.
More...

Then they should be selling the piss out of $140 futures with absolutely zero risk against their forward production to the "speculators" who are paying these "idiotic" prices no?

If Exxon, Chevron, and Saudi Arabia believe oil is $100 overvalued, isn't it THEM speculating if they haven't sold out their next 10 years of production at these "outrageous" prices?

If I was mining widgets in my backyard and a bunch of specs were paying a 200% premium over fair value, I sure as hell would be selling widget futures instead of telling the world what a bunch of fools the buyers are. These guys are so full of shit!
 
Everyone in the oil industry simply knows that its getting much worse and there is not enough supply.

OPEC is busy trying to talk the price down saying there is no supply problem, because they fear demand destruction.

Yes, there's plenty of oil reserves in the ground, probably more than any estimates, but it is harder and more costly to find and bring online. The reality is they can not bring supply online fast enough to meet the demand curve.

Without the supply, the only solution is higher prices until demand curve gets back to a more flat/linear progression.
 
Quote from QQQShort:

Is anyone currently not able to receive oil in sufficient quantities to meet their needs?
More...

Absolutely not.

This is what happens when you can tie up specific amounts of a commodity, with a paper agreement, without ever having the need, intent or desire to take delivery of it.

You are able to take supply off the market, by contract, and for as long as you desire, as long as someone agrees to store the oil for you.

It's all a game.

Coffee is bought overwhelmingly by users, who refine and package the raw commodity into a branded good to be sold in retail stores.

Oil is just 'tied up' by contractual obligation, never to be delivered, but taken off the market nonetheless by the highest bidder, who wouldn't know what to do if it showed up at their front door by mistake.
 
Quote from ByLoSellHi:

Oil is just 'tied up' by contractual obligation, never to be delivered, but taken off the market nonetheless by the highest bidder, who wouldn't know what to do if it showed up at their front door by mistake.
More...
The total amount of crude oil "tied up" and "taken off the market" in commodity futures is just a few weeks' supply. Those arguing that futures markets are driving spot prices seem to be completely ignorant of the vast scale of the spot market. Futures are a drop in the bucket.

In any case, commodity futures do not in any way, shape or form take supply out of the spot market. Commodity futures markets could grow far larger than the underlying spot market without undue influence on price discovery, as we have seen in numerous other derivatives markets. Remember the total notional value of OTC derivatives contracts, $500 trillion or so, is more than ten times larger than the world economy.

Martin
 
Quote from DataCruncher:

buyLowSellHi,
what do you think is the best way to profit from a decline in oil prices other than futures contracts?

I am looking at put options on some instruments but I am worried that the implied volatility has become too pumped up.
More...

Try some option spreads where you sell overpriced CALLs instead of going long on PUT options. Volatility drop will work for you that way.
 
my guess is Michael Masters is short ......

Speculators aren't the reason for IRAN, IRAQ, chinese/indian demand, us bases protecting the AMBO pipeline etc etc.......neeed i go on

and, if insto funds are the reason, then when/if they are forced to unwind (as every clueless member of congress seems to want), then the man on the street pays anyway....do you want to pay at the pump or through your pension

best cure for high prices is high prices
 
Yeah, definitely not speculation. When oil jumps $10 in one day, it's because all of a sudden we ran out of supply that day.

It's a perfect Supply and Demand equilibrium.

Much like wheat. Getting cut almost in half in a matter of 2 months because it rained wheat and bread for a few weeks somewhere in africa.


Quote from zzt:

my guess is Michael Masters is short ......

Speculators aren't the reason for IRAN, IRAQ, chinese/indian demand, us bases protecting the AMBO pipeline etc etc.......neeed i go on

and, if insto funds are the reason, then when/if they are forced to unwind (as every clueless member of congress seems to want), then the man on the street pays anyway....do you want to pay at the pump or through your pension

best cure for high prices is high prices
More...
 
Quote from 1000:

There was a note out of a European bank about 3-4 years ago or so, and their analysis showed $70 pb oil.

Every oil person, says that oil should be at the max $80 pb, and that is the max.
More...

Care to show the math how they got that price? Also, it doesn't matter where a price SHOULD BE, but where IT IS.
 
You must log in or register to reply here.
Back
Top