Skip to comments.Lehman Bros. Report: Oil Bust in the Cards
Posted on 05/11/2008 4:38:50 PM PDT by TennTuxedo
Is $120 oil even real? Not if you ask the Saudis, or even Lehman Bros. The investment banks oil expert said this week that the oil boom is due to bust. Economic growth across the globe will slow just as new refineries kick in, raising supply.
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Wouldn't surprise me. We've cut our driving by at least 15 percent. Multiply that several million times.
This is how it is usually presented, but believe it or not, I saw one analyst, or perhaps reporter, stating the opposite. They said the dollar is falling because of the rise in oil prices, LOL.
Funny that the dollar showed a small bounce in the last few weeks, while oil kept on going up. Helped by silly Goldman prognostications, no doubt.
I’m in DUG. For those interested, DUG is not a direct short on oil per se. It is an ETF that tracks 2X the inverse of the Dow Jones US Oil and Gas Index. Includes Exon, Chevron, as well as some DJUSEN swaps.
$50-$60 for oil feels too aggressive for me. I’m looking for a correction that will bring it back inline with the trend up, but am not willing to bet on a fundamental shift in the trend. The recent rise has been too steep (parabolic, quantum, exponential, whatever) and is mere speculative bubble garbage. It is the greater fool principle, in action.
I’m hoping for it to gap higher in the morning, as I’ve only accumulated about half of what I’d like to be holding. It could rise all this week (especially since too many people are looking for the crash at this point).
I can be patient.
I don’t think we’ll get $200 oil this summer like some have said. The Euro seems to be weakening slightly against the dollar after six years of dominance. And the Fed signaled that they would not lower interest rates immediately after the last cut because inflation is looming.
That is what I was wondering. It was a keyword or something and than it dissapeared. Hell, during the last Democratic debate both Hillary and Obama said nothing about Bakken. I want to know about the Oil that could’ve guaranteed us energy independence also.
It’s simply a matter of time before oil goes back to a dollar a barrel.
I can’t wait. Along with the magnetic fuel filter and the turbo velocity inducer I’ve already added to my car, I’m sure there’ll be many more to boost my mileage .... just kidding! I’m hoping we’ll see some significant advances.
Thanks, RWA ... the "quantum leap" thing is one of my pet peeves.
But I see FReepers on here everyday saying our only way out is to buy Oil company stocks. Just sit back and watch the profits roll in!
Everything but the True Cause.
My Exxon Mobil stock has been flat to down for the last 6 monts. See they are paying more for oil and then not able to pass along the full refining costs. Their "record" profits amount to 10 cents on the dollar.
Maybe the money is to be made in the exploration and development stocks.
When the dollar is devalued 100:1
I've not read much lately.....
Oil was worthless before, it will be worthless again.
We need to build a lot more nuke plants
You my FRiend have explained why I shorted these via DUG.
Oil took a dip today. DUG not quite so much yet. Either it is a crappy vehicle for shorting, or it is merely lagging oil prices along with the oil stocks.
Wish I had shorted USO - a more pure short for crude. It was down 2% today (or the short would be up 2%) with oil.
DUG, the fancy 2X Oil Services short (including Exxon) ETF was only up 0.54%.
The dollar has lost about half of its value against the Euro. At those rates, oil is in the $60/barrel range, which is high, but not that far out of line.
Well, maybe there is.
I was in Dublin TX on Saturday. I pass through on the way to Mom’s occasionally(mother’s day and such). Pull in the “regular” gas station, and the pumps are covered over. Price was 3.59. Oh brother, I think we have a gas shortage. But no, there is a new gas mega station “ALLSUP’S” just opened. $3.49 and everybody is there.
The overrated price on oil is a speculators dream come true.