Posted on 07/09/2008 8:35:21 PM PDT by curiosity
I'll bite
"The New York Mercantile Exchange, Inc., a subsidiary of NYMEX Holdings, Inc. , announced today that its crude oil futures contract reached record open interest levels for the third consecutive day."
What am I learning, or not as a matter of fact.
yitbos
Is this true?
Total and complete BS.
You’re right, even as it was cratering on the way down, they continued to push real estate as “something they ain’t making any more of”.
Before that, they claimed that companies weren’t influencing the electric market in California.
BAH! I heard all this about the housing bubble. “There is no bubble,” they said. “Supply and demand,” they said. “There aren’t enough flippers to control the market,” they said. “Home prices only go up,” they said. Bullcrap. It was all bullcrap, and now you are ready to believe the same thing about oil.
Please explain to me WHY oil is up 48% year-to-date alone? Increasing demand? Bullcrap. Oil futures are forward looking and we haven’t even begun to see the world demand destruction caused by these leap-frogging oil prices.
I’ll never remember to say “I told you so”. Take note and remind me when the oil bubble bursts and it becomes obvious to everybody and his brother.
Never mind. The people who told me the NASDAQ was correctly priced because it was a “new economy” and “profits don’t matter” never bothered to come back and eat crow. The people who said there was no housing bubble never bothered to come back and eat crow. Now why would the same type of gullible fools who believe there is no oil bubble be any more likely to eat crow when they are proven as wrong as the previous fools.
No, never mind. You needn’t bother. But I am still waiting for that explanation how issues of supply and demand alone have caused a 48% increase in oil cost year-to-date. I’ll give 20% of that to a collapsing dollar. I also know that the FED must eventually Volker the funds rate and that will strengthen the dollar, IMMEDIATELY lowering the dollar price of oil by 20%.
Now what is the other 28% year-to-date cost rise due to?
The Bum Rap on Biofuels
American Thinker | 5-13-08 | Herbert Meyer
Posted on 05/14/2008 3:59:06 AM PDT by Renfield
http://www.freerepublic.com/focus/f-news/2015711/posts
Campaign to vilify ethanol revealed
ethanol producer Magazine | May 16, 2008 | By Kris Bevill
Posted on 05/17/2008 9:22:13 AM PDT by Kevin J waldroup
http://www.freerepublic.com/focus/f-news/2017389/posts
Just because housing was a bubble doesn't mean oil is a bubble.
It was all bullcrap, and now you are ready to believe the same thing about oil.
Like you, I called the housing bubble. I moved to Seattle in 2006. Even though I could afford to buy, I chose to rent, and continue to rent, because I realized there was a bubble.
That's because there was data supporting the bubble hypothesis for housing: rents out of line with prices (much cheaper to rent, even without the tax deduction), flippers buying up virtually all new units coming online, etc.
There's zero data to back up the idea that there's an oil bubble.
Please explain to me WHY oil is up 48% year-to-date alone? Increasing demand?
That, and declining production in existing fields, and fewer than expected new finds in exploration.
Bullcrap. Oil futures are forward looking and we haven’t even begun to see the world demand destruction caused by these leap-frogging oil prices.
Both futures and spot prices are high. Futures prices are actually low compared to spot prices right now; there's a sizeable net convenience yield. Inventories are lower than usual for the summer. All the indicators point to a shift in fundamentals as the underlying cause.
If futures speculation were driving the current price, there would be a rise in inventories and futures prices and the net convenience yield would be negative. That's just not what the data show.
Never mind. The people who told me the NASDAQ was correctly priced because it was a “new economy” and “profits don’t matter” never bothered to come back and eat crow.
Unlike with the tech bubble, all the traditional fundamental indicators point to the conclusion current prices are rational: low inventories, high net convenience yield, few new fields coming on line, declining production in existing fields. There's nothing new here. Just good old fashioned analysis.
It's the bubble crowd who's waving their hands and claming everything has changed because of the supposedly evil speculators.
Now why would the same type of gullible fools who believe there is no oil bubble be any more likely to eat crow when they are proven as wrong as the previous fools.
We'll see who eats crow (hint: it's going to be you).
Okay. Then please tell me how exactly speculation in futures can lead to a spot price runup without causing a rise in physical inventory.
Also, please explain how a bubble is consistent with the fact that futures prices are actually low compared to spot prices, there being a sizeably positive net convenience yield.
Don't know. But even if it were true, I don't see how it's relevant.
The really unfortunate part is that she is the smarter of the two senators from Washington.
That's got to be one of the stupidest analogies I have ever heard.
A huge chunk of both generation capacity and the energy trading market were controlled by one company, which gave it sizeable market power.
None of the "evil" speculators supposedly driving up the oil price controls even 1% of the global oil market.
Just because one market can be easily manipulated does not mean another one can be as well.
That's right! There's absolutely no way airline CEO's could possibly attempt to blame someone else, like the evil speculators, for their failure to properly hedge their fuel price risk! No, not a chance. These men need to be taken at their word! /sarcasm
I agree with you, dear colleague, that we need to open up these resources, but we also have to be realistic about their impact on current prices. From the numbers I've seen, ANWR and the OCS aren't going to increase global supply by more than 3%. While that's nothing to sneeze at, and will help some, we shouldn't kid ourselves into think its some kind of panacea. Long-run oil demand elasticity is estimated to be around 0.4. So even if we increase supply by a generous 5%, that's only going to decrease the price by about 5%/0.4 = 12.5%. Nothing to sneeze at, but not all that impressive, either.
As to Rocky Mountain shale, while developing at least some of it may be just barely positive NPV right now, with oil price volatility being what it is, the option value of waiting for prices to move up is probably too high for any company to seriously undertake any large scale development right now. Hence even if we do start leasing it (as I believe we should), it will be quite some time before anyone chooses to start producing from it. Hence shale oil is likely only to help in a very long run.
What sayest thou?
btrl
Just because some markets were manipulated in the past (and, FYI, I never denied the eletricity markets were being manipulated), doesn't mean this market is being manipulated now.
I googled it, and all I could come up with was "better than real life" and "British Telecom Research Laboratories."
Somehow I doubt you meant either. Would you care to explain it to me?
Sorry for the confusion. It’s an old FR acronym for ‘bump to read later.’
Cheers!
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