Oil surges $11 to record $138

[Azoy?]

Thank you George Bush for fucking up out life with your stupid foreign policies.
At least if Saddam would have been there without any weapons of mess destruction oil would have continued to flow and helped.
Not that Saddam was an angle but you didn't see any oil disruptions in Iraq while he was around.
Can't wait for Bush to get out of the office.

[theking]

Originally Posted by Azoy?

Thank you George Bush for fucking up out life with your stupid foreign policies.
At least if Saddam would have been there without any weapons of mess destruction oil would have continued to flow and helped.
Not that Saddam was an angle but you didn't see any oil disruptions in Iraq while he was around.
Can't wait for Bush to get out of the office.

There is not a shortage of oil at this point...and how will the President being out of office alter the price of oil...if that is what you are implying. BTW...there is a prediction of $150.00 per barrel by the 4th of July.

[SomeCreep]

One word: bubble.

People never realize it though, until it pops.

[Azoy?]

Originally Posted by theking

There is not a shortage of oil at this point...and how will the President being out of office alter the price of oil...if that is what you are implying. BTW...there is a prediction of $150.00 per barrel by the 4th of July.

what i am implying is that him being out of office will change foreign policies.
it is bush's foreign policies that got us into this mess. then again all his friend's in the oil business love it and probably giving him some kickback for making them ultra rich.

[Socks]

And if you listened to any republican in the clinton administration, the first words out of their mouths was always "foreign policy"..

[Dollarmansteve]

I'm looking into my crystal ball.. it shows.. a massive trasfer of wealth as the speculative positions driving the price of oil to irrational levels unravel violently.

It times of a bubble, my favorite quote is: (which I first read in the gartman letter many years ago.. I forget who it is originally credit to)

"The market can stay irrational far longer than you or I can stay solvent"

[bloggingseo]

Bush doesn't care about how much oil is, the oil co's are recording record profits. Bush has gotten even richer, probably by leaps and bounds, because of the oil prices.

[emjay]

Originally Posted by SomeCreep

One word: bubble.

or possibly two : peak oil

[xxxRumor]

why doesn't USA invade Saudi Arabia and increase production?

[Dollarmansteve]

Originally Posted by emjay

or possibly two : peak oil

Peak tulips, Peak Pets.com, Peak US housing market...................

what happened to dow joes 100,000?

[camuk19]

Originally Posted by xxxRumor

why doesn't USA invade Saudi Arabia and increase production?

I hope this is a joke.

[theking]

Originally Posted by xxxRumor

why doesn't USA invade Saudi Arabia and increase production?

Maybe because increasing production is not the problem.

[theking]

Originally Posted by Azoy?

what i am implying is that him being out of office will change foreign policies.
it is bush's foreign policies that got us into this mess. then again all his friend's in the oil business love it and probably giving him some kickback for making them ultra rich.

There will not be any major changes in U.S. foreign policy no matter who the next president is.

[Azoy?]

Originally Posted by xxxRumor

why doesn't USA invade Saudi Arabia and increase production?

because if you do so you will piss off everyone not just the arabs cause the kingdom supplies to the whole world and not just the United States.
second you can't attack them just cause you need to increase production. they really didn't do anything to hard the US except to hold production back.
third you have plenty of oil but it's the demand for end products that are driving this market.
there has not been any new oil refineries built in the united states since the 70's. why ?
not because it can't be done but maybe cause the oil companies prefer to keep product low and prices high for end products.

[theking]

Originally Posted by Azoy?

because if you do so you will piss off everyone not just the arabs cause the kingdom supplies to the whole world and not just the United States.
second you can't attack them just cause you need to increase production. they really didn't do anything to hard the US except to hold production back.
third you have plenty of oil but it's the demand for end products that are driving this market.
there has not been any new oil refineries built in the united states since the 70's. why ?
not because it can't be done but maybe cause the oil companies prefer to keep product low and prices high for end products.

The "why" is because government regs...local governments...environmentalists...OSHA...etc. make it virtually immposibile to build a new refinery and the financial cost not fiesable...although it is my understanding that one is in the planning stages but will not be completed for ten or more years.

[payd2purv]

The price of oil is high because people are investing in it.

Why don't people get it?

[GAMEFINEST]

oil prices suck

[tiger]

Originally Posted by xxxRumor

why doesn't USA invade Saudi Arabia and increase production?

I hope you are joking and not really that stupid. Our economy would probably collapse if the Saudis pulled their money out.



Say hi to 6 bucks a gallon.

Its a bubble but bubbles take a while to burst.

[gadabout]

$200 on the way hooha
What can you do about it? use less

[bhutocracy]

Originally Posted by Azoy?

Thank you George Bush for fucking up out life with your stupid foreign policies.
At least if Saddam would have been there without any weapons of mess destruction oil would have continued to flow and helped.
Not that Saddam was an angle but you didn't see any oil disruptions in Iraq while he was around.
Can't wait for Bush to get out of the office.

Iraq has almost nothing to do with this.. it's producing basically as much oil now as in 2002 before the war. Obama couldn't fix it in the next 5 years if he tried.

[Spunky]

Blame Canada

[gadabout]

and kill Terence and Philip so Saddam can come back

[bhutocracy]

Originally Posted by payd2purv

The price of oil is high because people are investing in it.

Why don't people get it?

Originally Posted by SomeCreep

One word: bubble.

People never realize it though, until it pops.

If you honestly think this is just an investment bubble and oil iwould go back down to $10-$20 bbl if only investors would stop using it as a hedge agest the USD then you are more than delusional.

[marketsmart]

oil will be at $150 by the end of next month and $175 by the end of the year... FACT

[emjay]

Originally Posted by theking

Maybe because increasing production is not the problem.

Indeed, wheras increasing demand for oil from countries like China and India is...

[woj]

Originally Posted by bhutocracy

If you honestly think this is just an investment bubble and oil iwould go back down to $10-$20 bbl if only investors would stop using it as a hedge agest the USD then you are more than delusional.

Who said $10-20? I thought it's a pretty well accepted fact in the investment community that there is significant premium calculated into the price from all the speculators buying oil now a days...

If it's not due to speculation how do you explain 13% jump in price of oil in the past 2 days?

[emjay]

Originally Posted by marketsmart

oil will be at $150 by the end of next month and $175 by the end of the year... FACT

Time to by some December future contracts then marketsmart lol

Ulimately, however, speculation is a zero-sum game. Speculators never take delivery of the oil, whereas refineries do.

[Adultnet]

prices are crazy...

[David - PG]

Originally Posted by Dollarmansteve

"The market can stay irrational far longer than you or I can stay solvent"

That would be John Maynard Keynes

[ADL Colin]

Originally Posted by Dollarmansteve

I'm looking into my crystal ball.. it shows.. a massive trasfer of wealth as the speculative positions driving the price of oil to irrational levels unravel violently.

It times of a bubble, my favorite quote is: (which I first read in the gartman letter many years ago.. I forget who it is originally credit to)

"The market can stay irrational far longer than you or I can stay solvent"

I used to subscribe to that.

I think the quote is Keynes

[ADL Colin]

Originally Posted by David - PG

That would be John Maynard Keynes

my bad hadn't read down yet

[themonk]

buy iraqi dinars!!!!!!!!

[Iron Fist]

Bike to work

[Defiance Inc]

"If you honestly think this is just an investment bubble and oil iwould go back down to $10-$20 bbl if only investors would stop using it as a hedge agest the USD then you are more than delusional."

Then explain how an investigation caused the prices to drop
the same day it was announced? That doesn't have anything to do
with the dollar or demand. Or how this recent surge was because
the Central Bank of Europe said they were thinking of raising rates
to strengthen the Euro? Shit, just "mentioning" something causes
volatile activity! Sounds like speculation to me... call me delusional.

"The market can stay irrational far longer than you or I can stay solvent"

And they won't be happy till we're all in the poor house...

[kenny]

http://www.mi2g.com/cgi/mi2g/framese...ess/060608.php

Between February and May of this year the oil price went from below USD 90 to USD 128 a barrel, a monthly growth of 9 per cent. If the rise continued at this rate, it would mean an unprecedented doubling in price every eight months. In recent days, after the price briefly touched a high of USD 135, there has been a bout of profit-taking. Although the price fell it did not drop much below USD 125 and it has rocketed again to USD 135.

The latest price rise has baffled many. What has happened to supply and demand to cause such a steep and sudden price rise? Gordon Brown, the British prime minister, said last week that "the cause is clear: growing demand and too little supply". China and India are buying more oil. Costs of exploration and extraction are going up. Nigeria and Venezuela are causing anxieties about supply. But these factors are not new. Nothing has happened in the real oil economy to justify such a sharp and steep rise in its price.

There is a growing feeling that the latest sharp upsurge in the price of oil may be a speculative bubble rather than an outcome of market fundamentals. The US Commodity Futures Trading Commission indicated last week that there may be "system risk" and George Soros, the veteran investor, in testimony on Capitol Hill on Tuesday, warned that commodity index funds, which treat oil as an asset rather than a commodity to be bought and sold for use, are creating a bubble.

Bubbles come to an end eventually but there is no guarantee that this will happen soon. The global economy is likely to be forced into a serious crisis if we do not explore the possibility that this is a bubble that needs to be burst quickly. The market can then resume its trend, depending on whatever the fundamentals dictate.

Much of the rise in oil price is the result of activity on the New York Mercantile Exchange, the energy exchange. This is activity by index funds and pension funds that are investing in oil futures, not for direct use but as financial assets for profit. That contrasts with activity by oil producers and consumers who buy and sell to smooth out fluctuations in price and delivery.

These financial institutions -- index funds and pension funds -- are neither buying oil nor selling it. They are passive investors in commodities. They have invested USD 260bn (EUR 169bn, GBP 133bn) in commodity markets, compared with USD 13bn just five years ago. Much of this money is in oil. The Goldman Sachs Commodity Index is heavily weighted by oil -- 78 per cent compared with less than 2 per cent for precious metals.

The point is that this paper market is not driven by the pressures on demand and supply but entirely by price expectations. An underlying situation -- which may well indicate a medium-run rise in oil price -- is being exacerbated by the bolstering of expectations that prices will rise even faster. It is this extra layer of price rise that is driving money into even the farther future contracts. There are futures contracts being bought and sold for 2016 at USD 138 -- only astrologers pretend that they can forecast that far ahead.

How large is the speculator activity? The total open interest -- the number of open or outstanding contracts for which an individual is obliged to the exchange because that individual has not yet made an actual contract delivery -- in the 2008 contracts on May 21 was 849.472 contracts, which equals 849m barrels, or nearly 10 times the daily crude oil production. The daily volume in the 2008 contracts on May 21 was 657.391 contracts, equivalent to 657m barrels or nearly 8 times the daily crude oil production.

This is a problem that requires immediate action. The best way to counter speculation is to make it less profitable. Step one is to protect the regular traders in the real oil economy (those who intend to close their positions by making or taking delivery of oil) and charge them a lower margin than those who have no intention of plying the oil trade. The purely financial traders must be made to pay a proper price for their speculation. This can be done simply by increasing the margin that they have to put down to trade as open interest, from the current 7 per cent to about 50 per cent.

It is up to the Group of Eight leading industrialised nations leaders to urge Nymex to implement this policy. It is in tune with free market logic and at the same time it makes oil speculation less profitable. There is no need for western governments to go down on their knees to Arab oil sheikhs, or to ration oil to the increasingly cash-strapped and angry consumers.

[ProducerCashDave]

god diggity damn

[topnotch, standup guy]

Originally Posted by tiger

Say hi to 6 bucks a gallon.

Its a bubble but bubbles take a while to burst.

Maybe it's time someone found a nice sharp pin.

Actually, there was a time when Americans could count on their government to wield that pin. Nowadays their government is part of the problem

[bhutocracy]

Originally Posted by Defiance Inc

"If you honestly think this is just an investment bubble and oil iwould go back down to $10-$20 bbl if only investors would stop using it as a hedge agest the USD then you are more than delusional."

Then explain how an investigation caused the prices to drop
the same day it was announced? That doesn't have anything to do
with the dollar or demand. Or how this recent surge was because
the Central Bank of Europe said they were thinking of raising rates
to strengthen the Euro? Shit, just "mentioning" something causes
volatile activity! Sounds like speculation to me... call me delusional.

"The market can stay irrational far longer than you or I can stay solvent"

And they won't be happy till we're all in the poor house...

You're missing the forest for the trees. Yes there is speculation. I never said there wasn't, just that it's riding on the back of the fundamentals. POO was $20 in early '02, it's not just speculation that has added $120 to that in the last six years. Will oil "crash" to "only" $80-$100 sooner or later at least temporarily? Most likely. The salient thing to understand is that whether $80 or $138 we're entering a new era of higher prices and we're not going to return to the free and easy 90's gas use for any extended period of time. It's delusional to think that it's all just speculation and if only those wall street types would get regulated.. or back off, everything would be rose-coloured again... that all you need to do is sit back and wait for the bubble to burst and you can get back in your hummer.
Oil should be $100 anyway. I hope a small speculators premium stays in the price. There needs to be incentive to develop alternative energy and this will never happen with POO @$50

[tony286]

I got to tell you I dont think this will be not bad in the long run. It's fucking crazy we depend on something that is in places we are hated or are time bombs waiting to go off. It's time we got off oil, it would launch new industry in us with us jobs and we can tell the arabs go eat your oil.