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drbubb

Oil to $160 !!, Gold to ... where?

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to be honest this is more like a blow off top , the popular trade is to short the dollar and yen and buy commodities, I think the wheels have started falling off this trade

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one hell of an article from Clive Maund here on oil!

 

http://www.safehaven.com/article-10087.htm

 

Long-and-short of it if you don't have time to read it is the USi s slowly taking over the oil producing world and will consolidate itself further as the world's superpower and the US broad stockmarket is on the verge of an almighty bull market....

 

Not sure I believe it, but it's an entertaining read! :blink:

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ZG is "re-iterating his $160 oil forecast" on Financial Sense.

 

He cites more anecdotal evidence for why oil is in shortage

When Puplava asked him by when, I think he said "Monday". No month or year though.

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When Puplava asked him by when, I think he said "Monday". No month or year though.

Right. I dislike vague and dramatic statements. But things are not improving oilwise (in terms of maintaining the economy).

 

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When Puplava asked him by when, I think he said "Monday". No month or year though.

 

I heard "maybe Monday"... meaning: maybe very soon

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I heard "maybe Monday"... meaning: maybe very soon

Fair enough, but he did first say it a few weeks ago on CWR and it was presented as happening within a week, ZG has now said it on 3 broadcasts and nobody pulls him up on it. I like ZG, but I think he perhaps wanted to make a name for himself on this one because if it had gone to say $150 or so, his name would have been all over the media. His tipping point appeared to be the "fibs" that the oil companies and VI's of the industry have got away with so far, but why would any of this change now? They are not going to come clean about it. $160 oil is coming, could be 90 days, 6 months or a year, it is coming, but ZG was wrong on this one if you take what he was saying seriously and the timeframe he talked about. The only exception being that he mentioned 90 days once, but there is a big difference between that and "next week", or "maybe Monday".

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Nigeria: ExxonMobil declares force majeure. 800 000 barrels a day shut in.

LONDON, April 28, 2008 (Dow Jones Newswires)

ExxonMobil Corp. (XOM) Monday took the drastic step of declaring force majeure on its energy operations in Nigeria because of an ongoing labor strike, signaling the damaging affect the dispute is having on its operations in the country.

 

The declaration means ExxonMobil is unable to meet its contractual obligations because of a shut-in by the strike of around 800,000 barrels a day of crude oil output.

http://www.rigzone.com/news/article.asp?a_id=61147

 

Here's a YouTube video of the truckers protesting in DC. A convoy of trucks honking their horns.

 

Somebody at PowerSwitch provided this interpretation:

"We demand that reality be altered because we don't like it."
:rolleyes:

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Worth a read.

 

PERHAPS 60% OF TODAY'S OIL

PRICE IS PURE SPECULATION

http://www.financialsense.com/editorials/e.../2008/0502.html

 

A few things about this which ease my concerns with the claim:

 

1) I'm not sure this speculative demand will dry up anytime soon in today's environment

2) Soon after futures markets were created isn't it true that the majority of traders were "non-commercial" or speculative? ie. What's new?

3) let's not dismiss peak oil so flippantly

4) Just because rising prices may be (is) related to dollar weakness does not make it irrelevant; quite the contrary. We all know it's a hedge because it represents a real asset.

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Goldman Sachs: Oil to $150 - $200 within 6 months to 2 years

Why?

Supply is not keeping up with increased demand - whodathunkit

 

Hillary is now speaking GARBAGE about oil- blaming it on OPEC- she says Opec are setting the price!

(Hey, Lady, what about the demand coming out of China and India?)

I hope he nails her @ss on such a silly statement. She truly deserves to lose, and may today.

If so, good riddance to her fear-based type of obfuscation

 

The US was wasted its wealth buying stuff it does not need from the Chinese,

and on an unsustainable living arrangement, with half its citizens in the suburbs,

dependent on cars. It must end. Hillary lacks the vision and the honesty to tackle it.

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"Drivers have known for years that throttling back is a sure way to improve gas mileage...

 

Recent surveys show that many drivers have changed their habits to cut fuel costs, but the changes tend to be ones that bring immediate gratification _ such as using the Internet to find stations with the lowest prices and putting less gas in the tank instead of filling up, said Larry Compeau, executive officer of the Society for Consumer Psychology and an associate marketing professor at Clarkson University.

 

"If you buy a more fuel-efficient car or find cheaper gasoline, those things are right in front of you," Compeau said. "Whether you do 65 or 55 is much more nebulous. There's no way for you to immediately see the impact."

 

Based on recent highway traffic volume trends, throttling back to 60 mph from 70 mph would likely reduce gasoline usage between 2 percent and 3 percent, which is about what happened when the 55-mph limit was imposed in the 1970s, said David Greene, a senior researcher at the U.S. Energy Department's Oak Ridge National Lab.

 

"We're talking about a 2-to-3 percent reduction in demand, which would mean a much larger percentage reduction in price, maybe 10 percent," Greene said. " (???)

 

THEY THINK the oil price rise is temporary - IT ISNT TEMPORARY !

 

Once they get that, they will begin to think about "the living arrangement".

They need to get out of those stranded suburbs, and somewhere closer to work- with a shorter drive

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"Drivers have known for years that throttling back is a sure way to improve gas mileage...

 

Recent surveys show that many drivers have changed their habits to cut fuel costs, but the changes tend to be ones that bring immediate gratification _ such as using the Internet to find stations with the lowest prices and putting less gas in the tank instead of filling up, said Larry Compeau, executive officer of the Society for Consumer Psychology and an associate marketing professor at Clarkson University.

 

"If you buy a more fuel-efficient car or find cheaper gasoline, those things are right in front of you," Compeau said. "Whether you do 65 or 55 is much more nebulous. There's no way for you to immediately see the impact."

 

Based on recent highway traffic volume trends, throttling back to 60 mph from 70 mph would likely reduce gasoline usage between 2 percent and 3 percent, which is about what happened when the 55-mph limit was imposed in the 1970s, said David Greene, a senior researcher at the U.S. Energy Department's Oak Ridge National Lab.

 

"We're talking about a 2-to-3 percent reduction in demand, which would mean a much larger percentage reduction in price, maybe 10 percent," Greene said. " (???)

 

THEY THINK the oil price rise is temporary - IT ISNT TEMPORARY !

 

Once they get that, they will begin to think about "the living arrangement".

They need to get out of those stranded suburbs, and somewhere closer to work- with a shorter drive

 

I was thinking things through a little as I filled up this morning (in the UK), standard unleaded at the quivalent of c.$9.66 / gallon. In the UK the price of fuel has very little impact on demand as has been shown over the last 25 years as road use has doubled from 260billion kms to 520billion km in that period. Yes, people may now think twice about those short journey's to the shops, but distances are so small that even if people did decide to try and limit trips I don't think this would have a massive impact.

 

In terms of leaving the car at home on a more permanent basis, say for the commute to work, in the UK those people not using public transport already could not possibly switch 'en masse' to trains and buses; there simply isn't the capacity following decades of ineffiency and malinvestment in public transport. There is no option. 'Local bus and light railway journeys' decreased in the last 20 years by 12% from 5bn journeys to 4.4bn, albeit with (apparently) a small increase between 1995 and 2006 if you believe the labour gov't stats http://www.dft.gov.uk/162259/162469/221412...trends2007a.pdf

 

I read somewhere, indeed the report above backs this up, that Britains railways cost the UK government about 5 times as much in 2004 (£5bn per annum) through wasted subsidies than when British Rail was privatised starting in 1994 (£1bn), for only a 50% increase in rail journeys and capacity. That obviously sucks big time.

 

The US is quite different, but I'm not sure the outcome will be any better. It seems to me there are 2 sides of the private fuel usage coin in the US. One is the commute/living behaviours and the other is the leisure/driving season. Someone with more first hand experience than me may wish to comment, but it seems to me that a choice could actually be made in relation to not doing the driving holiday this year, whereas again, currently there is no choice, or perceived no choice, in using the car to commute; the proposition to use public transport in the US I suspect is even more dire than in the UK, as faced with joining the 'working classess' on the bus downtown I'm sure the 'middle class' is not particularly thrilled. My point is that I am suspect the majority of US citizens currently using their car to commute will not change behaviour as fuel costs increase, in line with the UK experience which currently has fuel costs proabably over twice the average in the US?

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Surely oil is worth a sell spreadbet for 24 hours based on this?!

Can't help feeling that there is a sell off coming soon. It will do the market good to shake out some of the speculators. Oil right now looks like it is at the stage gold was at a month or so ago.

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Can't help feeling that there is a sell off coming soon. It will do the market good to shake out some of the speculators. Oil right now looks like it is at the stage gold was at a month or so ago.

 

I feel like a pull back to $115.80 is comming. Probably monday.

 

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Just to add, from last Friday's InvestmentU Newsletter, with all the talk of $160 or $200 oil, this market could still fall down to earth with a bang. There is an oppsoing view that needs to be respected, as the speculators will jump ship quickly if and when this view takes hold.

 

A lot of smart people are beginning to believe this bull market will die hard. Whether you agree or not, it's worth listening to their side.

 

According to Michael Lynch, President of Strategic Energy & Economic

Research, oil has now become "the mother of all bubbles." He has a few pertinent facts on his side.

 

The U.S. is the world's largest oil consumer. Yet our economy is in a slump. Despite the sharp rise in oil prices this year, oil demand in the U.S. is actually down 2% so far.

 

According to the federal Energy Information Administration, high prices and a weak economy will knock down U.S. oil consumption by 90,000 barrels a day this year.

 

The situation is similar in many other parts of the world. The International Energy Agency (IEA), the Paris-based energy watchdog of the world's richest nations, just lowered its forecast for world oil demand growth by 460,000 barrels a day. The IEA also sees supply from outside OPEC growing by 815,000 barrels a day, the strongest growth since 2004.

 

According to Mr. Lynch, "The run-up in price we're seeing in the last six weeks or so has happened while the fundamentals have, generally speaking, gotten bearish."

 

Tim Evans, an energy analyst at Citigroup in New York, agrees. He says the oil bubble is "still expanding" and insists "there is no supply-demand" deficit.

 

So far the futures market has shrugged off these arguments. Oil is up roughly 25% this year and prices have almost doubled since the start of 2007.

 

And who can say? Maybe oil will trend higher. Perhaps much higher, especially if we see a major supply disruption.

 

But high prices always sow the seeds of their own collapse. Consumers will start to conserve. Producers will search for oil that was once too costly to extract. Supply and demand will come back into balance.

 

Right now the bulls are having their way. But it would be foolish to believe there are no red flags on the horizon. Chief among these is that you keep hearing "the story."

 

You know the stories. "The internet changes everything." "They're not making any more real estate." "Oil has nowhere to go but up."

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According to the federal Energy Information Administration, high prices and a weak economy will knock down U.S. oil consumption by 90,000 barrels a day this year.

 

Dont get me wrong, I think there must be a big correction, but my comment to the above would be "so what?". 90kbpd is but 0.1% of global demand. It won't make any difference :blink:

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Just to add, from last Friday's InvestmentU Newsletter, with all the talk of $160 or $200 oil, this market could still fall down to earth with a bang. There is an oppsoing view that needs to be respected, as the speculators will jump ship quickly if and when this view takes hold.

 

you know, I though that too, but after seeing that Nicaragua protests for high oil prices today, after reading that yesterday factories in Spain manufacturing biodisel were forced to stop labours (read: biofuels do not work) , a lot of news like that may be there in other countries that I am not aware of, so I doubt it will have a correction more than $3 , and I think it goes straight to 150 on this run up. I wonder who is going to sell right now? We need a very strong news for that. Like "trading futures only for contracts with physical delivery" in a congress room just 15 min before voting, may be speculators will leave it.

Don't know, maybe a correction to 120 and thats it.

 

 

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you know, I though that too, but after seeing that Nicaragua protests for high oil prices today, after reading that yesterday factories in Spain manufacturing biodisel were forced to stop labours (read: biofuels do not work) , a lot of news like that may be there in other countries that I am not aware of, so I doubt it will have a correction more than $3 , and I think it goes straight to 150 on this run up. I wonder who is going to sell right now? We need a very strong news for that. Like "trading futures only for contracts with physical delivery" in a congress room just 15 min before voting, may be speculators will leave it.

Don't know, maybe a correction to 120 and thats it.

Maybe, but corrections happen and often they have a habit of surprising.

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Maybe, but corrections happen and often they have a habit of surprising.

 

the last drop to 121 was due to some speeches about baning oil trading.

now, this week there had more "good" news for oil:

"If there's a war against Venezuela, with the oil in this soil, it won't depart from the Venezuelans, it won't go to anyone."

http://www.bloomberg.com/apps/news?pid=206...mp;refer=energy

chances are we will have a large correction after the olympics.

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