[dynoman]

"If you'd really like to know why energy mkts are so high (probably a dubious proposition) here it is. Drastically reduced worldwide daily excess capacity (known as 'ex-cap') plus an unfortunately timed (though quite inevitable) refining squeeze."

That is at direct odds with what the Shell CEO said;

"There’s no point in predicting the oil prices, because it tends to be a pretty bad prediction. Why is that? Because there are so many factors at play. What I will say is that as recently as this weekend, I looked at data showing that crude-oil stocks in factories around the world are very normal or even better than normal. It’s a bit of a mixed picture, but by and large, there is no physical shortage in the world. So there must be two reasons [for the current prices]—geopolitical tensions in the world, and the amount of nontraditional money like hedge funds moving into the oil market.”

“Are traders distorting the prices? Nobody knows the correlations there; it’s new territory. But some people estimate there is north of $100 billion in hedge-fund money in oil markets right now, which is of course significant. But that said, I’ve grown up in a physical world, and what I see from the physical world is that the lines of ships at refineries, and things like that, are OK.”

I think I will go with his analysis over yours.

[SAJ]

Two points, since you're not really worth wasting time over.

One: of course there's a ton of hedge fund money in the mkts. You get a nice 'duh' for that. Hedge funds, though, can easily trade the short side of a mkt ust as they do the long side, and they most certainly will do when their analysis favours getting short. The OJ mkt is a very recent example of this. Sugar #11 was an example last year.

The fact that hedge funds are generally long energies is temporarily bullish. However, you've only to look at what happened to Amaranth **and** none other than the Bank of Montreal to understand that those who make one-way bets can and do get utterly slaughtered when the mkt turns on them...which it always does, sooner or later.

Two, wet supply simply is not keeping up with real live wet demand, hasn't been doing so since roughly July-August 2002. The CEO of Shell knows this; he may or may not have said as much in the interview you quote. Every (reasonable) trader on NYMEX and ICE, and SIMEX, and DUX, and probably Bombay knows it, too. This is the ex-cap figure at work, down from 6.5MM bbl/day in mid-2002 to something like 2.8MM bbl/day now -- and which hit its low in Jan a year ago, roughly 0.6 MM bbl/day, which, if you look, is when prices started going wild. Not just after Katrina and Wilma, but fully 90 days later.

Yammer on as you will; you haven't a clue about what drives energy prices and don't appear to be likely to acquire one in the near future.

If you'd care to try to learn, you can find VERY accurate figures and some really quite excellent analysis by subscribing to WTRG Economics. The Russian Central Bank, to name just one large player, finds Jim Williams' analysis invaluable.

Meantime, I'm diagonally ratio-spreading the NG mkt, and short the V gas crack -- that's SHORT, boyo -- and working on making a nice packet this year. Bolder traders are doing other trades, and, y'know what...we all simply laugh at guys like you.

Ta-ta. Have fun nursing your hatred for ''speculators''.