Jet Fuel Prices WILL Be Climbing A LOT, and Soon

[snow-back]

Oops double post.

Quit stuttering!

 

[jetflyer]

Technical pull back to around the low 120's is more than likely what we are seeing. Could be wrong though

I agree.

I think things are so bullish that may be the extent of the pullback but I wouldn't rule out a much larger drop before the bull market resumes.

Jet

 

[jetflyer]

Why is the Price of Oil rising? Read this Wall Street Journal article which is a MUST READ first about this net-export problem and I have new information below:
Wall Street Journal article on Net Export Problem
If you wonder why Canada isn't on the top 15 list, the answer can be seen in the Oil Drum article below. Canada is the only the 16th largest exporter.

I found out some more information about the NET-EXPORT Decline Problem the world is facing right now for oil production.

What are Net Exports?
The amount of oil available from the exporters for the importers of oil to buy.

From the Oil Drum Blog:
Is a Net Oil Export Hurricane Hitting the US Gulf Coast?

They discuss the WSJ article and then show ALL the exporters' shipment totals from every exporter of oil for the last three years.

Here are the total EXPORT TOTALS in Millions of Barrels Per Day from the World's 44 Oil exporting countries:
2005- 46,342.2
2006- 45,838.2
2007- 44,832.5

Change Year-over-Year:
2005 to 2006: -1.1%
2006 to 2007: -2.4%

THIS IS SHOCKING.......
I had no idea that things were this bad already. The importers of oil have lost 1.51 million barrels a day in available oil the last 2 years!

That's 1 1/2 ANWR's lost for us to buy on the world market in 2 years.

THIS HAS TO BE WHY THE PRICE OF OIL IS GOING UP.....
DECREASING AVAILABLE SUPPLY with INCREASING GLOBAL DEMAND......
The price has to rise to make demand decrease at the same pace as supply.

The WSJ says Russia has just started to export less and that the trend of a decline in net exports is continuing. Not good for the importers.

There's no way to spin this as good is there CRX or PCL?

Let's hope the new projects the world is working on can reverse this trend but it doesn't look good at all. Almost all the exporters are declining....

Jet

 

[crxpilot]

http://www.smh.com.au/news/money/heres-the-good-oil/2008/05/31/1211654366719.html

Here's the good oil

• David Potts
  June 1, 2008

Advertisement

As the greenback finally recovers, oil prices will begin to retreat.
So much for speculation of oil hitting $US200 a barrel, which would either put petrol prices at $2.45 a litre or push the Australian dollar to $US1.15.
Talk about implausible. The dollar getting to $US1.15, I mean.
Since at $US200 the global economy would shut down overnight, that would be hooroo for the Australian dollar.
Still, the $US200 prediction has a good pedigree. The investment bank Goldman Sachs, a heavy oil futures trader itself, says it could happen within six months, though I bet you didn't see the small print about it being a "super spike" that would end in tears.
The other forecaster was OPEC's president who helpfully offered a ready reckoner: every 1 per cent move in the US dollar equals a $US4 move the other way in the oil price.
Perhaps you could cut this out and stick it on the fridge because it'll give you a better idea of where petrol prices are going than FuelWatch ever will.
Speaking of which, anything the Rudd Government does - or doesn't do, for that matter - to cut petrol prices will backfire by lifting the prices of everything else.
The real income boost would add more to inflation than petrol prices ever did. Plus, the more oil we import the lower the dollar and the higher our interest rates.
But back to the oil bubble.
The US is already cutting back as motorists shun four-wheel-drives and airlines are either going broke or introducing new charges such as a baggage collection fee (oops, hope Qantas isn't reading this).
There's even a surplus of oil - Iran admits it has 12 tankers in the Persian Gulf loaded with crude that nobody wants - yet the futures markets (and jetflyer) are carrying on as if we've reached the last drop.
This exposes two fundamental flaws in the oil market. One is that prices are based on futures contracts, which encourages speculative hoarding paid for by cheap money from the US and probably even cheaper money from Japan.
The other is nobody knows how much supply there really is (or how far refineries can be stretched). No wonder the market has gone mad. In fact oil delivered tomorrow will cost less than in a year's time so, if you want the stuff, why wait?
Sanity will return when the US dollar finally bottoms, as it will.
That'll not only take away the anti-greenback sentiment in the market, which has helped oil and other commodities such as gold but, more to the point, OPEC's ready reckoner will kick in. Once the US dollar starts rising the oil price will fall.
But why would the US dollar spring back in the middle of a recession?
Well, US exports are booming, most taxpayers are getting a special cheque for $US600 from Uncle Sam, interest rates have bottomed, Wall Street is on the mend and the world's central banks want it.
Oh, and if the US dollar doesn't snap back the global economy will shut down. That's why.

 

[jetflyer]

I think JP Morgan's call of $150/barrel by July 4th because of serious inventory draw downs won't happen unless a more serious supply scare occurs soon but I think $150 in 6 weeks is possible.

Here is my analysis. Please look at the chart I created!

CLICK ME FOR THE CHART
I've found a strange coincidence (or not a coincidence) in the last two run ups......

When oil hit $135.09 the 200 dma was 95.06
135.09/95.06= 1.421 x the 200 day moving average

When oil hit $139.12 the 200 dma was 97.88
139.12/97.88= 1.421 x the 200 dma again!!

1.421 x the 200 dma is recurring... I think 1.421 x the 200dma will be a rising ceiling until there is widespread panic over something... hurricane, war with Iran, Saudi past peak admission, or widespread undeniable shortages...

In my new opinion we'll go down to just below $130 then run up to about $145, then run down to about $134 and run up to break $150 in about 6 weeks.

If my theory holds the 200 dma will have to be $105.55 to allow oil at $150 (105.55x 1.421= 150) At the rate it's rising that will be about 6 weeks........

Let's see if I finally get something right.........

Oh and I made the blue line the 40 day moving average in the chart below. Look how it appears to be the floor!! The red line is the 200 dma.

Looking at the chart below with the 40dma as the floor and 1.421 percentage as the ceiling, you have to admit technical analysis can be pretty amazing and make things look orderly atleast after the fact

CLICK ME FOR THE CHART

I still hold to my opinion that oil will eventually crash back to the 200 dma which is currently about to cross $100 and rising quickly, but it may not occur until after $150 when the summer is close to over......

Thanks for listening and the charts are neat huh?,
Jet

 

[jetflyer]

Financial Times- Gazprom predicts oil will reach $250 in 2009

.Gazprom, Russia’s gas monopoly, on Tuesday predicted oil prices would reach $250 a barrel in 2009.

The striking prediction came as the International Energy Agency, the developed world’s energy watchdog, warned that record high prices were needed to choke off demand in order to balance the oil market.

It is the IEA’s most candid admission to date that oil supply is struggling to catch up with Asian demand, and follows the sharp rise in prices last week, which saw crude jump more than $16.24 in less than 36 hours to a record $139.12.

Gazprom’s prediction came at a strategy presentation in Deauville, where Alexei Miller, chief executive, said: “Today we are witnessing a very great change for hydrocarbons. The level is very high and we think it [the price of oil] will reach $250 a barrel.” A company spokesman specified that Gazprom believed that level would be hit in 2009.

That is substantially higher than forecasts by analysts, who see oil prices in 2009 ranging between $100 and $200.

In its monthly oil market report, the IEA said “supply growth so far this year has been poor and higher prices are needed to choke off demand to balance the market”. It added: “Abnormally high prices are largely explained by fundamentals".

Mr Miller agreed with the IEA’s assessment, saying that speculators were not ”a determining influence”. He said: ”Competition for resources and their use is growing.”

The market responded by pushing prices back up after they had fallen below $134 earlier in the session. Nymex July West Texas Intermediate rose 70 cents to $134.95, while ICE July Brent added 53 cents to $134.38.

As expected, the IEA cut slightly its forecast for annual oil demand growth, but surprised the market with a deep reduction in its forecast for supply growth from non-Opec nations, leaving the world more dependent on the producers’ cartel.

It cut its demand growth forecast further by 80,000 b/d to an annual increase of 800,000 b/d because of record high prices, the slowing US economy and the partial removal of fuel subsidies in some Asian countries.

However, the agency warned that so far, there were “very few signs of slowing demand in non-OECD countries where economic growth is far more significant than price in determining demand”.

The cut in the IEA’s forecast for oil demand growth was overshadowed by a larger cut in forecast supplies. The agency cut its forecast for non-Opec supply growth to just 455,000 b/d, or 225,000 b/d below last month’s forecast. It expected most of the non-Opec fresh output to be in the form of biofuels, which would account for 72 per cent of the supply increase.

The non-Opec supply growth forecast for 2008 is now below the growth achieved by the group both in 2007 and 2006, in spite of significantly higher oil prices.

The agency also warned that the imbalance between demand and supply forced a counter-seasonal drop in rich countries’ oil inventories in April. It estimates that stocks fell in April by 8.1m barrels, compared with a traditional increase in April of about 30m barrels.

It warned that current prices could “impinge upon growth prospects”, even though the global economy is more resilient to rising oil prices. “Globally, the high oil price is contributing to inflationary pressures,” it said.

The IEA’s warning echoes comments on Monday by Tony Hayward, chief executive of BP, who said the oil market was not well supplied.

“In a well functioning market where supply and demand are balanced, prices should be stable. Where prices are high, however, they show that supply is not responding adequately to rising demand ... and that is where we find ourselves today,” Mr Hayward said.

Francisco Blanch, head of commodities research at Merrill Lynch, said on Tuesday he was raising his forecast for WTI prices in the second half of the year to $121.50, based on “a combination of lower than expected supplies and unrestricted demand. Non-OPEC output is really struggling to expand.”

Merrill Lynch, the International Energy Agency, and the CEO of BP says the oil market is not well supplied.

The article says global inventories were drained by about 8 million barrels in April compared to a normal rise in inventories of 30 million barrels.

There is not enough oil out there right now and inventories are being drained. This can't continue. Inventories can't go to ZERO!

The FUNDAMENTALS are very bullish for higher prices in oil right now........

Jet

 

[PCL_128]

I find that prediction to be absurd, but if they're correct, prepare for total economic meltdown and anarchy in this country. Oil at $250/bbl is almost $8/gallon gasoline. You think the people will in this country will sit back and take that? I think not. They can't afford to.

 

[jetflyer]

I find that prediction to be absurd, but if they're correct, prepare for total economic meltdown and anarchy in this country. Oil at $250/bbl is almost $8/gallon gasoline. You think the people will in this country will sit back and take that? I think not. They can't afford to.

I think it's crazy high as well. I can't see it that high. $200 easily next year but $250? Hmmmm...

Do you think people should have listened to the people like me 3 years ago saying a supply/demand problem was coming in oil?

I wish more people would have listened to us "peak oil doomsdayers"(as you idiots like to call us) because if they would have we might have taken more action than the 0 action we've taken so far........

These high prices have been SO VERY PREDICTABLE for anyone paying attention to the new supplies coming online and the current depletion in fields across the world.

Jet

 

[PCL_128]

I think it's crazy high as well. I can't see it that high. $200 easily next year but $250? Hmmmm...

I even find $200 to be absurd. I don't think we'll cross the $150 mark before the bubble pops. But, of course, you don't believe there's a bubble.

But even $200 could cause some serious problems for law and order in this country. That would represent $6/gallon gasoline. That's another 50% increase in the price of fuel. At that price, many people would be paying more for fuel each month than they would be paying for rent. These aren't just the poor, but the vast middle classes. You think most middle class people will put up with this for very long? I don't.

 

[jetflyer]

No I don't think the middle class will put up with it. $6 is coming. Probably much, much higher than $6 especially when supply actually starts falling....

That middle class is going to have to learn to put up with the high prices though because they're coming....

Order will be maintained. Don't worry about that....

For 3 years I've been screaming from hill tops for our govt. to do anything and everything possible to solve the coming energy crisis but no one listened. No one listened to any of us.

Colin Campbell, Cheney advisor Matthew Simmons, Peter Tertzakian, Congressman Roscoe Bartlett and Congressman Tom Yudall, and many other peak oil believers have been doing everything in their power to get people to listen.

They were all brushed off as "DOOMSDAYERS".

Well you'll get your damn doom now idiots!

Sorry I'm pissed right now....

Jet

 

[JoeMerchant]

Peak oil has been predicted for awhile....but like most problems in this country we don't really care until it is too late....

Next on deck....

Entitlement programs....They will make this problem look like a cake walk....

 

[PCL_128]

No I don't think the middle class will put up with it.

That middle class is going to have to learn to put up with the high prices though because they're coming....

Well, which is it? Will they put up with it or not? I say no.

Order will be maintained. Don't worry about that....

I think that's incredibly naive. If your vision of oil prices becomes reality, then America's version of the Bastille will be Exxon-Mobile corporate headquarters. Ready for some heads to roll (literally)?

 

[EMB170Pilot]

Well, which is it? Will they put up with it or not? I say no.



I think that's incredibly naive. If your vision of oil prices becomes reality, then America's version of the Bastille will be Exxon-Mobile corporate headquarters. Ready for some heads to roll (literally)?

Thppppppt

 

[jetflyer]

Well, which is it? Will they put up with it or not? I say no.

I think that's incredibly naive. If your vision of oil prices becomes reality, then America's version of the Bastille will be Exxon-Mobile corporate headquarters. Ready for some heads to roll (literally)?

I think the people that don't put up with it will simply whine. But what else can they do? I don't see people burning down Exxon! Seriously? The National Guard may be defending Exxon and we may see some riots in the future but order will be maintained.

People are going to adjust. They'll work a 4 day work week, car pool, take public transportation, get a smaller vehicle. They have no choice. Many will have to eat beans and rice.

America will become more poor that is a fact. They'll have to deal with it until the alternatives kick in in significantly high enough amounts.

People will have to deal with reality or reality will deal with them.........

Jet

 

[PCL_128]

I think the people that don't put up with it will simply whine. But what else can they do? I don't see people burning down Exxon! Seriously?

Yes, seriously. I don't believe that middle class Americans will allow themselves to be thrust into poverty en masse, and that's exactly what would happen with $250/bbl oil. Whether they actually burn Exxon to the ground is a matter of how government reacts to their plight. If government doesn't solve their problems for them, then the people will resort to drastic measures.

 

[JoeMerchant]

The top 5 oil companies are not US corporations, and most oil comes from other countries....In fact only 2 of the top 12 oil companies are US corporations....

How does the US control an industry that is largely based in other countries....How is Obama going to control something that is largely outside of the US?

 

[JoeMerchant]

Yes, seriously. I don't believe that middle class Americans will allow themselves to be thrust into poverty en masse, and that's exactly what would happen with $250/bbl oil. Whether they actually burn Exxon to the ground is a matter of how government reacts to their plight. If government doesn't solve their problems for them, then the people will resort to drastic measures.

OK....let's go with your little vision of things....We shut down Exxon/Mobile and Texaco....They are only a small part of the oil picture.....Your socialist friend Chavez supplies more oil......

The largest 5 oil companies aren't US Companies and only 2 of the largest 12 oil companies are US companies.....

So most oil comes from other countries and most oil companies are foreign based....You going to burn them down too?

Shall we talk about this from a pragmatic position or should we continue to allow emotion to run the debate?

 

[PCL_128]

OK....let's go with your little vision of things....We shut down Exxon/Mobile and Texaco....They are only a small part of the oil picture.....Your socialist friend Chavez supplies more oil......

The largest 5 oil companies aren't US Companies and only 2 of the largest 12 oil companies are US companies.....

So most oil comes from other countries and most oil companies are foreign based....You going to burn them down too?

Shall we talk about this from a pragmatic position or should we continue to allow emotion to run the debate?

Joe, you misunderstand. I'm not advocating such a course of action or even saying that it remotely makes sense. I'm simply telling you that Americans will behave irrationally and violently if they are forced into poverty because of a complete economic collapse. America is not Haiti. Our citizens will not put up with a couple hundred million people living in poverty conditions. Riots, attacks on companies like Exxon-Mobile, etc... won't make any sense, but people don't behave rationally when they are placed in such circumstances.

Don't get me wrong, though. I'm not actually predicting any such unrest, because I don't believe that oil will go any higher than $150/bbl before the bubble pops. I'm simply entertaining jetflyer's wild oil predictions.

 

[crxpilot]

Keep beating those doomsday drums little boy. Maybe if you beat loud enough someone will hear you. Not me.

 

[Soverytired]

W
I think that's incredibly naive. If your vision of oil prices becomes reality, then America's version of the Bastille will be Exxon-Mobile corporate headquarters. Ready for some heads to roll (literally)?

Exxon-Mobile currently currently competes to pump oil from something like 7% of the world's proven reserves. Everything else is either nationalized or off limits due to short-sighted US denial policies.

Exxon-Mobile only produces something like 3% of total world gasoline output. Yet THEY'RE the bad guys? Puh-lease. They're easy scapegoats, and congressmen who are utterly ignorant love to drag them up and accuse them of gouging on TV. . . not the producers of the other 97% of gasoline.

Unless you'd care to suggest that their minute 3% is so critical that it can impact price greatly? Well, here's a thought . . . let them explore for oil all over the US and the US continental shelf! Wait! You say that would only be a drop in the bucket! But wait, small amounts don't make a difference. Except when it's Exxon.

Error. ...error ....does not compute!

(Relax. Americans are sheep, and will do what they're told. But man, will they whine like crazy. For those of you who've read "The Long Emergency", remember the author is a survivalist and never bothered to cite a single footnote in suport of his doom-and-gloom end of the world nonsense)