Oil goes below one twenty whatever and now it's going to $80?
A few weeks ago (was it less than that?) oil was going to $200.
The assumption/extrapolation of the immediate trend and the willingness to flip flop is obviously very common.
The thing that I think is more important is supply and demand. Recently estimates for US consumption were cut to 19 million barrels per day for 2008. This doesn't make a whole lot of sense to me unless demand destruction turns out to be real.
So maybe oil has put in a high for the foreseeable future but what is your opinion for long term supply and demand globally? If you think demand must go up then selling too much of your energy exposure now, despite what you might hear on TV or read on the interweb, might turn out to be a mistake in two or three years if oil stocks turn up when no one expects them to and then get away from you.
Wikinvest Wire
14 comments:
Oil prices raced far beyond what the current supply/demand situation called for and I believe put in their highs for 2008. However, the long term supply/demand situation hasn't changed and prices will continue to rise over the next decade, albeit at a measured pace.
Ironically, a Dem controlled congress with an Obama presidency could put a lid on another bout of runaway oil prices. Expect a hybrid in every garage (whether you want one or not) and massive subsidies to public transporation and the alternative energy industry. Your hard earned tax dollars will be hard at work reducing U.S. oil consumption.
Keep in mind the Dems aren't honestly concerned about high gasoline prices, in fact they prefer them. These folks worship at the alter of Algore and have fallen hook, line and sinker for the global warming hoax.
So if oil prices will only rise at a gradual pace over the next few years, where is the next bull market: TAXES!
r
Don't rain on my parade Tom. I feel good and I want the feeling to last - LOL!
To Tom K.
Contemporary Republican conservatism is so freaking dead I'm surprised there is even one person clinging to it. Yet, it seems to linger. The Republicans had their chance, (with a full crew no less), and they blew it.
Sorry, I'm not a Republican.
Speaking of conservatives, ask a real fiscal conservative how "conservative" they think Republicans have been the past 8 years.
And who is this "full crew" of conservatives you speak of? Bush? McCain? Warner? Graham? Specter? Kyl? Martinez? Craig? Lugar? Snowe? Lott? Hagel? Gregg? Bennett?
You call them "conservatives"???
The US does not have an energy policy except to import whatever oil we need.
Maybe we should sell Alaska back to Russia. We could use the money to pay off the national debt completely.
Instead of interest payments on the national debt, we could dramatically cut taxes.
Russia could drill in Alaska and sell the oil on the world's markets.
Win-win.
too bad you didn't come up this idea yesterday. now we have to give russia the dirty senator discount which could be steep.
My guess.
For the rest of the year I think oil has put in an it high. It seems to me the price of oil matters most around expiration/delivery time. I think (?) it was in the mid $130s around expiration time the last few months. If that is right the $10-15 over that was the speculation premium. I think that premium is going away and may even "over correct". Demand reduction may(?) drive another 5-10% off the price. Hence my guess is it will trade in a range between $100 and $120 for an extended period of time. If that price is accurate, the energy industry should have plenty of incentives and continue to show strong profits and be a solid investment for awhile longer.
So maybe oil has put in a high for the foreseeable future but what is your opinion for long term supply and demand globally?
Is this trend going to reverse or even slow (see article below). I highly doubt it, and there are a billion of them. The entire move in 2008 from 100 to 145 back to 120 is probably just technical trend following. The LT trend is still up IMO because at least to me the long-term supply/demand picture is pretty clear.
http://tinyurl.com/5ah2uq
"If demand destruction is real?" WHO ya kidding? With 4 cars in the family
my gas bill has ...well gone up three fold in the past two years. Do you think we still don't think about where and when we drive? Demand destruction is common sense.
Also, read something this am where we have discovered enough new oil deposits in the Alaskan region, recently, that would solve any oil "problem" for the next 123 years. Don't be a patsy here, the Dems want us to hurt, so they can blame it on Bush. But we all know, politics aside, it's the Congress that will not allow drilling.
Maybe the short term demand is down because China is trying to clean up its act for the Olympics. Front page of WSJ today showed just how bad the pollution problem is and the drastic measures the Chinese government is taking to try to control it. It has been said that runaway oil prices have coincided with Inida's and China's increased demand.
Anon in CG
Anon in CG, you raise an important point about oil (and other commodities) consumption. I'd like to refine it and focus on China - they have the Olympics coming up and have the will and the money to buy everything to make sure it's the 'best, ever Olympics'. The authorities lowered the income tax rate on the lowest earners, about a billion, at the start of the year and have also been building infrastructure at incredible rates. It's their once-in-a-generation opportunity to display all the magnificence and grandeur of the Chinese government, enterprise, spirit etc etc yadda yadda.
I think all the immediate stuff that needs to be done in time has been completed. Of course there's still the long-term trend of new cities popping up in China, India, Russia, South America and the Middle East plus the infrastructure repairs still needed in the developed economies. I read a lot of people saying they're cutting back on their fuel use because of high prices, there's certainly caution out there.
Hey Roger,
I'm a momentum trader of stocks/options and have been trading for 10 years. I believe I have good insight to offer, so I started a trading blog about a month ago and also provide watchlists (long/short) for traders who either don't like research, don't have time, or just want to see what others are finding in their scans. I do market commentary, indicator analysis, and recently registered with Covestor to add credibility to my site. I’m ready to generate more traffic, so I'm looking for other traders who'd like to exchange links. I'm selective about whom I work with, and think that your site is one of the better ones. I’d welcome any advice you may have on how to generate more traffic.
Thanks for your time.
Jeff Pierce
http://zentrader.ca
i would tell you to link to many different related sites in your content, not just your sidebar.
something like "this person said such and such and I agree because..." or "I disagree because..."
other bloggers will find you this way and if your stuff is good they will reference your site in a similar fashion.
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