Here go the oil Speculator's again!

[Tornado Red]

Originally Posted By: grampi
Originally Posted By: Tempest
Demand and consumption are not the same.


No it doesn't. Name one instance where demand has risen, or fallen drastically...


There can be changes in the amount of inventory that users or consumers want to hold -- so demand can vary widely even while consumption remains stable.

This is because expectations change. There may be an expectation that consumption will increase in the future, so those responsible for supplying this demand will try to make sure they have enough.

Right now expectations are changing because everyone knows the events in Japan will change global demand for oil and fuels -- but nobody knows for sure. Will oil consumption in Japan increase to make up for lost electric generation from nuclear? Or will consumption fall because of all the cars that were destroyed and the roads that were damaged? What of all the factories that can't operate -- but then, will factories in other countries pick up the slack?

In the end, it may turn out that global use of around 80 million barrels per day will not change appreciably. But until all the disruptions are worked out, expectations will fluctuate.

 

[genynnc]

Three items:

Bahrain- unrest is only 160 miles from Saudi Arabia, with Saudi troops on the ground quelling uprisings.

Nuclear- certainly an unclear future in the political sphere, if not to be totally trounced depending on what happens in Japan but I think that's a forgone conclusion. What's going to take up it's slack? Certainly not wind and solar.

QE3?

 

[Shannow]

Originally Posted By: grampi
Originally Posted By: Tempest
Originally Posted By: grampi

The amount of consumption doesn't vary much either...

EXACTLY. BUT, demand does.

Demand and consumption are not the same.


No it doesn't. Name one instance where demand has risen, or fallen drastically...


Don't know about you, but I think 30% increase in demand over 15 years is pretty drastic for a finite resource.

 

[Tempest]

Quote:
QE3?


Bank of Japan is already printing like mad. Good chance the FED will follow.

 

[Tornado Red]

Japan holds upwards of $800 billion in Treasury debt, and instead of being a buyer it will most likely become a net seller for the next few years. Since other foreigners seem disinclined to buy even more Treasury debt, except at higher rates, this creates a quandary.

I don't think the markets would accept another round of quantitative easing -- the Federal Reserve simply buying Treasury debt. There is too much concern already about monetizing the debt.

So if you want a third- or even fourth-derivative result, there is a strong likelihood of another dip into global recession. Practically everyone owes more than they can afford to pay. Practically everyone, except certain people in the Congress and the Administration, believes the borrowing must stop. Some individuals and companies can go into bankruptcy, and some countries can default, but the US government cannot.

Okay, getting back on topic... recession will lead to reduced demand. But printing more dollars and yen and Euros and renminbi will create inflation. So where will oil prices end up? I don't know.

 

[grampi]

Shannow

Over a 15 year period, I would say that's a gradual increase. My comment was based on the current prices skyrocketing...

 

[Tornado Red]

Originally Posted By: grampi

Over a 15 year period, I would say that's a gradual increase. My comment was based on the current prices skyrocketing...


The elasticity of demand for gasoline and distillate fuels is such that it takes considerably more than a 1% change in price to effect a 1% change in the amount demanded.

In fact, we have seen extreme cases where a 100% increase in the price over a 6-18 month period has caused a drop of only 3-5% in the quantity of fuel demanded.

So it is the nature of the products and our dependence on them that lead to increased price volatility. With other products, stable demand means stable prices; with oil this is not always the case.

 

[odie]

With the NO FLY ZONE approved for LIBYA I'd expect oil to go to $109 . Just the go ahead will likely give it push .

 

[Tornado Red]

Already $104 on the May contract for WTI at the end of Friday trading in Singapore, with Brent at $116. Still a few hours before trading begins in London.

 

[Shannow]

Originally Posted By: grampi
Shannow

Over a 15 year period, I would say that's a gradual increase. My comment was based on the current prices skyrocketing...


finite resource ??? (well at least in our and our children's lifetime)

 

[bullwinkle]

The easy-to-get at stuff is definitely dwindling-but as prices rise the harder-to-get becomes profitable & comes on line (oil shale, oil sands, even synthetic fuel from NG & coal are possible)-it's not infinite, but a few are running up prices on the many as if it's GONE!

 

[odie]

" With the NO FLY ZONE approved for LIBYA I'd expect oil to go to $109 . Just the go ahead will likely give it a push . "

Good to be wrong . Hope cease fire holds up . Bahrain not looking good . Hate is a costly factor .

 

[Tornado Red]

Originally Posted By: odie
" With the NO FLY ZONE approved for LIBYA I'd expect oil to go to $109 . Just the go ahead will likely give it a push . "

Good to be wrong . Hope cease fire holds up . Bahrain not looking good . Hate is a costly factor .

You were not really wrong. WTI went up $6, then backed off $2. Brent went up $8 and backed off $2.

So the oil markets are still close to the top of the range, and are still nervous.

 

[odie]

Let's keep our fingers crossed .

 

[ryansride2017]

Originally Posted By: Shannow
Don't know about you, but I think 30% increase in demand over 15 years is pretty drastic for a finite resource.

I wish this chart was extended through 2009 or 2010 to show the affects of the worldwide recession and the high prices in 2008.

 

[odie]

Come MONDAY oil will likey pass $110 a barrel .

 

[Tornado Red]

Originally Posted By: odie
Come MONDAY oil will likey pass $110 a barrel .


Maybe. Sometimes the prices climb during the lead-up to a war, then drop after the bombs start falling.

I think if I had to guess, I'd say prices will bounce around roughly where they are now -- $100-105 for West Texas Intermediate and $115-120 for sweet crude from Louisiana or Nigeria. When I say "bounce around" I mean +/- $10 a barrel.

But I could be wrong.

 

[odie]

Most likely likely we'll see no improvements in LIBYA anytime soon . Thus oil / gas to go higher and remain that way for months to come . Then before you know it's hurricane season . Hopefuly mild like last year .

 

[ZZman]

And it keeps on rising......

 

[daves87rs]

150 anyone?