Crude Oil hits $81 a barrel.

[COOPERVANE]

Then again, when consumers display a willingness to keep consuming a product even at record high prices, why should price ever go down. Sure we need oil, but we don't all need to be driving 85 mph by ourselves in pick up trucks, but we still do.

My favorite quote. From Mr. Ben Stein:

"When did it become a good idea in this country, for an 88 pound teenager to drive a 9000 pound vehicle 20 miles to the mall to buy a $2.00 tube of lipstick?"

 

[~~~^~~~]

Some bad oil news today. Saudia Arabia is talking about switching to the Euro. Kuwait already has made the switch.

What we are seeing is not a supply / demand problem. What we are seeing is the failure of the US Dollar to maintain its status as the benchmark of the World's economy.

The Canadian Dollar soared past the US Dollar today as well.

Bush has tried to buy popularity by both pushing an expansionary monetary policy and military spending. Like anyone who borrows beyond their means - sources of liquidity start to dry up. As the Dollar falls, fewer international investors want to invest here, which drives the dollar lower.

Our Nation's policies have been reckless. I've just started moving my money offshore and have been shocked at how good those investments are performing (in dollar terms). Of course, the fall of the Dollar makes it look better than it really is.

When the government does begin to restrain spending we probably will see deflation and devaluation spread further than what we see in real estate presently. Likely a good time to buy. After all, if my parents had bought Microsoft stock when Ford or Carter were president, I would be typing this from a mansion on the beach.

 

[IronCityBlue]

They find oil, drill a hole in the ground, pipe it to the Persian Gulf, load it into a ship, sail halfway around the world, unload it, pipe it to a refinery, refine it, ship it on a truck to a gas station, and then sell it at a profit and it is still about 5x's less expensive then a bottle of water purchased at the same gas station.

So by that logic, since oil is at least 10 times more difficult to get to the consumer than water (even the fancy kind) then oil should be 10 times more than the most expeisive bottled water? What are we talking here, $100 a gallon? $200? More? Right. They are just using phony hypotheticals to justify what's really going on; the consumer is willing to pay the current ammount (and then some), so they will charge that ammount.

As for the dollar collapse, while we all like to root for the home team and are proud of a high dollar, if we can keep inflation in check (even if it gets to the 10% range some day) by comparison we would be able to flood the world with trade goods again and suddenly China isn't so dominant. Our sky high dollar for so long was one of the many factors responsibile for the economic rise of the second and third worlds. Everything goes in cycles.

 

[tyuwerty]

Some bad oil news today. Saudia Arabia is talking about switching to the Euro.

Do you have a source for this? I am working in KSA and they keep saying that they won't change monetary policy.

I would like to read it myself as it would be good for the contract work here to be paid in EUR now.

 

[AC560]

So by that logic, since oil is at least 10 times more difficult to get to the consumer than water (even the fancy kind) then oil should be 10 times more than the most expeisive bottled water?

The logic is that oil is an incredibly good value for the price paid for it. A bottle of Evian water, not so much (unless apparently you fly for CO).

 

[ultrarunner]

All you folks will be much happier if you quit your bitching and switch some of your holdings to energy stocks.

I did, and I can't wait till the next quarterly earnings releases.

Rock on! ;-)

 

[SplitBar]

All you folks will be much happier if you quit your bitching and switch some of your holdings to energy stocks.

I did, and I can't wait till the next quarterly earnings releases.

Rock on! ;-)

GSF & RIG

Got em 5 years ago and have held and made a killing.

:beer:

 

[Palerider957]

GSF & RIG

Got em 5 years ago and have held and made a killing.

:beer:

TSO has had a good run as well. OIH is a good (but expensive) energy ETF. I agree RIG is/was a good play.

 

[jetflyer]

Time for some truth:
There are SUPPLY/DEMAND PROBLEMS.......

Major Banks are predicting $90-95 this winter because of supply/demand problems.

From: Reuters/CNBC
$95 Oil Seen if OPEC Holds Output Levels: Goldman Sachs
By Reuters

.U.S. crude prices could top $90 per barrel this autumn and hit $95 by the end of the year, if OPEC keeps oil production capped at current levels, Goldman Sachs said in a report issued on Monday.

U.S. oil prices have risen above $74 per barrel Monday, driven this month by higher demand and lower supplies (FROM ME: DID THEY ADMIT SUPPLY/DEMAND WAS ACTUALLY THE PROBLEM?! WOW), the report said, pointing out that such fundamentals could tighten further unless key OPEC members hike output.

"We believe an increase in Saudi Arabian, Kuwaiti and UAE (United Arab Emirate) production by the end of the summer is critical, to avoid prices spiking above $90 a barrel this autumn," the report stated.

OPEC agreed last year to lower output by 1.7 million barrels per day (bpd), and Goldman said global oil production is down about 1 million bpd from last summer's levels.

Disappointing output growth from non-OPEC producers also helped tighten supplies, Goldman said, adding global demand was up by 1 million bpd from year-ago levels.

"Our estimates show that keeping OPEC production at current levels, and assuming normal weather this coming winter, total petroleum inventories would fall by over 150 million barrels or 6.5% by the end of the year, which would push prices to $95 a barrel without a demand response," the report forecast.

Global Oil DEMAND UP 1 mbd from last year.
Global Oil SUPPLY DOWN 1 mbd from last year.
Global crude inventories(not the Strategic Petroleum Reserve) are being drained very quickly across the globe.

This article came out BEFORE THE OPEC MEETINGS. OPEC decided to increase the CEILING for production 500,000 barrels. Unfortunately OPEC was already pumping 500,000 bpd above the ceiling so they just moved the ceiling to what was really happening.

There will be hardly any extra oil brought to world markets, so Goldman Sachs will probably be right and we'll see $90-95/barrel.

Hope you guys learned something!
Jet

 

[jetflyer]

Time for some more truth:
There are SUPPLY/DEMAND PROBLEMS.......

T. Boone Pickens: Crude Oil Could Hit $100 by Year End

… With global supply at 85 million barrels a day, Pickens said the projection for the fourth quarter is 88 million barrels a day.

“The trend is up, demand is up and supply is flat, so it’s got to go on up,” said Pickens, CEO of BP Capital. Still, he didn’t rule out a short-term pullback to $78 before then.

Here is the link to watch the Pickens video of his TV interview:
Pickens on CNBC talking about oil supply problems

Another good interview with Pickens on CNBC talking about oil supply problems

The laws of supply/demand suck.
85 million barrels a day available/
88 mbd needed this fall and winter.
Global crude inventories(not the Strategic Petroleum Reserve) are being drained very quickly across the globe.
Hmmmmmmmmmmmm.

He says oil could come back to $78 before continuing upwards. $74 is the 50 dma (day moving average) which is a good falling point in my opinion.

Oh and Greenspan says $100 oil is coming..... that libertarian swine.

Hope you guys learned something!
Jet

 

[jetflyer]

Oh and the Dollar has dropped dramatically recently and is just above the all time low because the FED lowered short term interest rates.

Isn't it funny that long term interest rates ROSE on this news? This is because everyone now realizes that interest rates are going to have to go up in the long term to kill the inflation the FED just ENSURED we'd feel.

The lower the dollar goes, the higher oil prices, gold, wheat, corn, soy beans, sugar, copper, silver, etc. will go for Americans.

Here comes inflation in America...

Jet

 

[wmudriver]

Yeah but this sustained run up is supposedly based on hurricanes that haven't materialized, wars that haven't happened and speculation based future demand that makes the housing value speculation look rational. Nothing has tripled the cost of oil to punp out of the ground or refine, and the demand arguement is false because no one on earth is unable to get oil. Everyone is getting as much as they want, yet the price continues to rise based on what might happen. Well whatever it is, it hasn't happened during the entire time of the triple-qradrouple price run up. Its all speculation and fake futures, much like the false value home equity run up. It will collapse eventually.

You sir...have wisdom beyond your years.

History is repeating itself and will continue to do so.

 

[jetflyer]

You sir...have wisdom beyond your years.

History is repeating itself and will continue to do so.

So the fact that supply is at 85 million barrels a day and that demand is supposed to be 88 million barrels a day in the fourth quarter doesn't make your wise self think that maybe there is a supply/demand problem?

Unbelievable!
Jet

 

[wmudriver]

So the fact that supply is at 85 million barrels a day and that demand is supposed to be 88 million barrels a day


Jet

Sounds like you're speculating too.

IronCity is spot on conerning the pricing of oil...speculation/futures. It goes up because we're forcasting (speculating) that there is going to be a more active hurricane season, Geopolitical escapades, and such. All speculation.

Now I'm going to go and drive my dually F350 up and down the highway, full speed, with the windows down, a/c running, baby seal skin seat covers, eating a big mac in the old styrofoam box and throw it out the window when i'm done. j/k

I'll stick with the old mantra: Opinions are like a$$holes, everyone has them and they all stink.

 

[Wiggums]

History is repeating itself and will continue to do so.

Hmm, like the history of peak oil? It was accurately predicted for the United States, and it was also accurately predicted for the North Sea. Predictions for the current peaking in Mexico and Saudi Arabia are starting to come true. So why are we not taking these predictions of the total worldwide supply seriously?