Posted on 08/08/2008 10:48:46 AM PDT by kellynla
Bad news from the Baku-Tbilisi-Ceyhan pipeline - an installation that may not normally draw much of your attention, but which is a throbbing artery of global energy supply, carrying vital oil supplies from Central Asia towards a tanker terminal on the Turkish coast. On some remote, sun-baked plain of Anatolia, an explosion sparked a fire earlier this week, temporarily cutting the flow through the pipeline.
But guess what? Here's the good news: the oil price did not zoom upwards in response, not a blip, barely a flicker. Actually the price of a barrel of crude has been falling: from a peak of $145 in early July, it came down to $117 and was trading yesterday at $120. That's almost a 20 per cent drop in little more than three weeks.
If the trend continues into September at anything like the same rate of descent, most of the inflationary spike of the past 12 months will miraculously have been sliced away. This is a dramatic reversal, and it is worth trying to work out why it is happening and what it means.
Just possibly, it means that what investors refer to in shorthand as the great "oil up" story has finally revealed itself not as the fundamental reflection of scarce supply that its adherents liked to claim, but as a simple, speculative bubble that was always going to burst.
(Excerpt) Read more at telegraph.co.uk ...
Holy crap, didn’t you just post another article about oil going to $200 a barrel? Stop the teeter totter, I wanna get off!
;)
It’s interesting that those speculators are still making money as the price drops - now who will the Demo-rats blame for rising prices or now, falling prices.
I’ll have to bookmark this and also see if the Russia/Georgia conflict conflict will mess with the prices as well.
Winter will be the time to see if the bubble has really burst.
I thought it interesting to have two contrasting views...
Good. I’ll be expecting my $3/gallon premium any time now.
Oh, that’s right.
What’s crazier is that the Telegraph printed both articles.
“The Great Oil Bubble Has Burst”
I was wondering what that loud popping sound I heard on my way to work was! And here I thought it was the Triumph Triple “talking” to me on a down-shift.
One is a report from the Chatham House think-tank, the other is a Telegraph economic journalist. Both appear in the Telegraph, because the Telegraph reports news.
It does seem crazy, but in the early years of the 21st Century a paper reporting actual news is a real novelty :0).
I wouldn’t get too enthusiastic about this piece...
“when” Israel hits Iran, expect the price of crude to go straight through the roof!
Media will spin this into bad news somehow.
Is it possible that the market is responding to price incentives and that, as a result, demand is falling while supply is rising? That is the way markets are supposed to work.
Speculators just try to guess which way that balance is moving. If the balance isn't moving the way they guess, they lose their shirts. Speculating against fundamentals is not a good idea.
Obama wants to sell our National Reserve and buy cheaper oil from the Saudis. What he doesn’t tell you is that the Saudi oil is heavy crude. It costs much more to refine it into gas than our light sweet crude. He’s looking for higher gas prices.
We certainly felt every % price increase! How about the same price decrease? 20% off of $4. - I should be paying $3.20 instead on $3.93, geeeeeee, I wonder who is making that money?
‘We certainly felt every % price increase!’
Not really, oil went from $70 to $147, gasoline went from $3.xx to $4.xx.
Ee still have to go through the “Israeli air-strike on Iran” scenario before too long..and who knows how high the price will go after that.
More importantly - who will get credit?
I think the Republican House Rebellion played (is playing) no small role IMHO.
The price of a gallon of gas includes refining, shipping, taxes, overhead, etc. Figure for thumbnail calculations that this is about a buck a gallon. So 22% off of $3 is 66 cents off, plus the overhead means $3.34.
We're not there yet, but my locals are doing $3.65 and the good people of Carlisle PA are paying $3.37 right now.
September should see us around $2.80-$3.00, IMHO.
Wait for gold to pop. I’m buying gold at $200.
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