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


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An alternative view.

Oil's surge to $126 echoes dotcom bubble.

 

What a specious article! /

http://www.telegraph.co.uk/money/main.jhtm...9/bcnoil209.xml

Excerpt:

"More generally, the recent run up in commodity prices far exceeds what we would have expected to see on the basis of the long-run historical relationship with long-term interest rates.

It is notable how many times in history a period of easy money and credit availability has set off a series of booms in stocks, property and often commodities as well, all at around the same time.

Now that the latest bout of easy credit has come to an abrupt end and housing is a bust, the bubble in commodities is the next one to watch."

 

Oil is a global market.

Rates arent so low in China and India, so the argument falls apart

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What a specious article! /

http://www.telegraph.co.uk/money/main.jhtm...9/bcnoil209.xml

Excerpt:

"More generally, the recent run up in commodity prices far exceeds what we would have expected to see on the basis of the long-run historical relationship with long-term interest rates.

It is notable how many times in history a period of easy money and credit availability has set off a series of booms in stocks, property and often commodities as well, all at around the same time.

Now that the latest bout of easy credit has come to an abrupt end and housing is a bust, the bubble in commodities is the next one to watch."

 

Oil is a global market.

Rates arent so low in China and India, so the argument falls apart

Plus, although i don't have it in front of me, Jim Rogers has an excellent graph in Hot Commodities which shows and inverse correlation between equities (generally) and commodities.

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Supply fears push oil beyond $129

Tuesday, 20 May 2008 15:48 UK

http://news.bbc.co.uk/1/hi/business/7410870.stm

 

Oil prices have surged past $129 a barrel as Opec comments that it would not be boosting output in the coming months increased concerns about supply.

 

Speculation that China would need to import more fuel in the aftermath of its earthquake also continued to drive prices, analysts said.

 

Oil investor T Boone Pickens forecast that prices would reach $150 this year.

 

Last week, prices were supported by Goldman Sachs forecasting that oil would reach $141 a barrel later this year.

 

Remember at the start of this thread when frizzers interviewed Zapata George, we probably all though he was going over the top with his short term oil price prediction, $165-200 a barrel seems very possible and is even now being spoken about openly in the main stream media.

 

Here is an interview on CNBC with Robert Hirsch (Hirsch report) they actually talk openly about peak oil while showing peak oil production graphs in the backgound.

 

http://www.cnbc.com/id/15840232?video=747947551

 

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This call is looking better and better by the day.

 

Just heard Radio5 with Simon Mayo and various oil experts talking the oil price.

 

30 mins of chat. NOT ONE mentioned peak oil. NOT ONE mentioned China and India. NOT ONE mentioned money supply growth.

 

FFS

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Major, major volte-face from the IEA.

Report: IEA set to cut oil-supply forecast

 

SAN FRANCISCO (MarketWatch) -- The Paris-based International Energy Agency is getting ready to issue a sharp downward revision of its oil-supply forecast, according to a published report.

A story in the online edition of the Wall Street Journal early Thursday reported IEA's forecast revision signals growing pessimism about whether oil companies can keep abreast of booming demand.

Read the full story at WSJ.com (Subscription).

The Journal reported the IEA is attempting to assess the condition of the world's top 400 oil fields. Its findings won't be released until November, but it is clear that future crude supplies could be far tighter than previously thought, the report notes.

The IEA has predicted previously that supplies of crude and other liquid fuels will keep pace with rising demand, topping 116 million barrels a day by 2030, up from around 87 million barrels a day currently, according to the report, which added that the agency now is concerned that aging oil fields and diminished investment mean that companies could struggle to surpass 100 million barrels a day over the next two decades.

marketwatch.com

I notice on the various discussion boards I frequent that people in last couple of days are getting really edgy - even the veteran peak oil people.

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Oil investor T Boone Pickens forecast that prices would reach $150 this year.

<snip>

Here is an interview on CNBC with Robert Hirsch (Hirsch report) they actually talk openly about peak oil while showing peak oil production graphs in the backgound.

 

http://www.cnbc.com/id/15840232?video=747947551

The T Boone Pickens' interview is well worth checking out: T Boone Pickens on CNBC. He was the founder of Mesa Petroleum which was very active in the North Sea in the early 1980's.

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This call is looking better and better by the day.

 

Just heard Radio5 with Simon Mayo and various oil experts talking the oil price.

 

30 mins of chat. NOT ONE mentioned peak oil. NOT ONE mentioned China and India. NOT ONE mentioned money supply growth.

FFS

 

The superficiality (& wrong-headedness) of most commentary on Oil prices is alarming.

The real (only) solution is to MANAGE demand destruction. Where have you heard that, apart from GEI?

(and maybe Matt Simmons, although he puts it differently.) I must find time to write a FS article about it.

 

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This call is looking better and better by the day.

 

Just heard Radio5 with Simon Mayo and various oil experts talking the oil price.

 

30 mins of chat. NOT ONE mentioned peak oil. NOT ONE mentioned China and India. NOT ONE mentioned money supply growth.

 

FFS

 

Oil experts..... oil tankers more like it :lol:

 

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Major, major volte-face from the IEA.

 

marketwatch.com

I notice on the various discussion boards I frequent that people in last couple of days are getting really edgy - even the veteran peak oil people.

Wren, Are you saying they are edgy about the demand supply situation or that this short term spike is looking toppy?

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Is $130 oil a bubble?

Some say no. They say unlike the tech and real estate bubbles, there's no overabundance of supply.

Others say these high prices are not sustainable.

 

CNN: http://money.cnn.com/2008/05/23/news/econo...oney_topstories

 

oil_prices_052208.mkw.gif

 

"A bubble is where supply overwhelms demand," said Stephen Leeb, an investment manager who has authored two books on oil scarcity.

 

Leeb pointed to previous bubbles - like the tech bubble in the late 1990s where companies with zero earnings issued massive amounts of stock, and the real estate market a decade later where home builders went on a frenzy, overshooting the number of homes the market could absorb.

 

"But unless I'm missing something here, I don't see any massive increase in the supply of oil," he said.

 

Like many in the not-a-bubble camp, Leeb pointed to surging demand from places like China - some estimates see auto ownership there surging 30-fold in the next few decades - coupled with dwindling supplies as the main reasons behind pricey oil.

 

Thursday, the International Energy Agency gave advance warning that its previous forecast for supply and demand remaining in pleasant equilibrium over the next two decades was flawed. Its new projections, due in November, will say supplies may fall 10 percent short of demand, according to a report in the Wall Street Journal.

 

Leeb said Russia was already seeing a drop in production, and there's little evidence Saudi Arabia could increase production even if it wanted to.

 

"If the two biggest oil producers in the world can no longer increase production, that's a catastrophe, not a bubble," he said.

 

== == ==

 

He sounds like Zippy !

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Wren, Are you saying they are edgy about the demand supply situation or that this short term spike is looking toppy?

These are not primarily investors. I mean peak oil aware people who are now getting seriously worried about the economic and social consequences. Even though we have been predicting this for several years it was "theoretical" - now it's beginning to feel uncomfortably real.

 

I've noticed peak oil aware people are becoming increasingly common (unlike 2 years ago, say) on more general discussion boards.

 

 

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I am going to use this in MW next week: a bubble is something that is going up rapidly in which you don't have a position.

 

Good line, its funny how these people who are calling bubble in the oil and commodity markets are the same people who couldn't see a bubble in the stock market and real estate. Also wasn't it the FED who said they should not attempt to prevent bubbles because its too difficult to tell is it is a bubble until after it has burst at which point they will attempt to mop up.

 

Paul Krugman writes about 'The Oil Nonbubble' in this article for the New York Times. I believe he has been taking quite a bit of flack from his usual supporters on the left because of his opinion over oil.

 

 

http://www.nytimes.com/2008/05/12/opinion/...amp;oref=slogin

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This call is looking better and better by the day.

Is that the $160 call that ZG said would happen 2 months ago? :P

 

To be fair, he did hedge by saying 90 days, he could still be right.

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These are not primarily investors. I mean peak oil aware people who are now getting seriously worried about the economic and social consequences. Even though we have been predicting this for several years it was "theoretical" - now it's beginning to feel uncomfortably real.

 

I've noticed peak oil aware people are becoming increasingly common (unlike 2 years ago, say) on more general discussion boards.

Yes, thought that was what you meant; just clarifying, cheers

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Iraq to the rescue, or a few more fibs?

 

Iraq could have largest oil reserves in the world

 

Iraq dramatically increased the official size of its oil reserves yesterday after new data suggested that they could exceed Saudi Arabia’s and be the largest in the world.

 

The Iraqi Deputy Prime Minister told The Times that new exploration showed that his country has the world’s largest proven oil reserves, with as much as 350 billion barrels. The figure is triple the country’s present proven reserves and exceeds that of Saudi Arabia’s estimated 264 billion barrels of oil. Barham Salih said that the new estimate had been based on recent geological surveys and seismic data compiled by “reputable, international oil companies . . . This is a serious figure from credible sources.”

 

http://business.timesonline.co.uk/tol/busi...icle3964957.ece

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Is that the $160 call that ZG said would happen 2 months ago? :P

 

To be fair, he did hedge by saying 90 days, he could still be right.

 

we are going up, we are going up. ZG is right. He has years in oil trading, just discount his exagerated optimism and thats it, timing market precisely is impossible. When iraq is ready to extract thier barrels we are going to be at 200, not an issue.

Right now the parabolic move should be completed at 150 at least, just waiting to touch 128 as mere "formality" and up again.

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Shell sees end of 'easy oil' era

Tuesday, 27 May 2008 15:11 UK

Steven Duke, BBC News

http://news.bbc.co.uk/1/hi/business/7421792.stm

 

The boss of Shell UK, the London-based arm of the Anglo-Dutch oil company, has warned
the era of "easy oil" is over.

 

In an interview with the BBC, James Smith said that energy companies were having to go to ever more extreme lengths to sustain production.

 

Shell has been criticised for making huge profits after oil and fuel prices surged to record breaking levels.

 

However, Mr Smith said the firm could do little to ease consumers' pain as it needed money to fund future operations.

 

Watch the interview

 

http://news.bbc.co.uk/1/hi/business/7422210.stm

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