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$150 /barrel Oil anyone?

My observations on history are that unemployment is a distinct factor, and at least as important as food. Americans are in the richest top 0.1% of all the humans who have lived since we started living in cities. Most aren't feeling very rich right now because human perception is based upon changes, not levels. Moslem societies fail because there are far too few opportunities to make your life better because they are wholly corrupt and run by small tribe/faith cliques. If you're not the "right sort of person" you don't just have an inevitably crap life, it's a boring crap life.

Saudi bought some time by educating people, which is a problem in a Moslem society. Islam is quite different from contemporary Christianity in that one is supposed to try and understand it, Xians have to believe not think. The result is that although what they are taught is bollocks, it is intellectually rigorous bollocks which is why so many radical moslem leaders are clerics, whereas most senior Christian leaders seem so remarkably dumb. Since Saudis have the intellectual tools to realise their culture is failing the variable is whether they have the nerve to act.

I agree about the evangelicals, the foot soldiers did a good job, but the people in charge were chosen on religious affiliation, especially in the period after takeover when competence collapsed because you had senior staff who were chosen on (inter alia) their views on abortion.
 
Again. Nineteen-Seventy-Freaking-Three. The cat would determine said limit, its preparing for a drop. This has been my sole argument.

I think in this particular issue there has been one misunderstanding. We both agree that the price is preparing for a drop. You stated the date 1973. You can analyze that date from oil side and you'll see that after shock, price began to drop (that was logical) but sustained at much higher level than it had been dancing previously on average. Let's quickly analyze the period: OPEC imposes embargo on USA and price increases from $10 to $50. Then after those events came to an end, processes began to stabilize on commodities market. During 1974 to 1979 oil price was stable in the range of $42 - $53. So you see the difference??? It dropped from $50 to lower range but not as much as it was earlier (I mean $10). That's what's gonna happen now. Oil price will definitely drop but sustain at higher level than it was earlier. After 1979 there were Iranian revolution and some other big events and oil began to fluctuate again. For example Saddam invading Kuwait, Gulf War, Asian economic crisis but let's leave these moments untouched now since they are a bit irrelevant for today's situation. I think I made my point in this issue.

Again, strip away the fear and speculation (and step away from the socio-political framework for a moment) Show me the cause for such a rapid increase?

Wait. I won't step away from socio-political framework since this caused the main harm.
Show me the cause for such a rapid increase?

Sudden outbreak of revolutions are enough reason for panic. And if you come up with the question why it was sudden, well, recall what the leaders of huge oil consumer countries were talking during the Egyptian revolt: "We hope the revolutionary spirit will not be spread to other Muslim countries". They didn't expect it. Nobody knew if Libya would be next. Again, look at 1973, as I said in earlier post - that shock was a process which more or less could be predicted. At least it was stated in OPEC ultimatum to USA (to review and halt the decision of supplying military equipment to Israel...). So that is a bit different from unpredictable shock. I think I explained why I cannot move from socio-political framework. All in all, it is the hugest determinant of oil price. It is not mathematical models explaining the fluctuations in oil price adequately...
Show me the cause for such a rapid increase?

...if you require any historical data analyze as a cause.



Could not/would not. Again ,<insert your favorite conspiracy theory here>

... those Athabasca Oil Sands are looking a whole lot more attractive right now, aren't they?

Review the past responsibilities taken by Saudi Arabia during oil shocks and it's a fact not my opinion so it's not worth arguing right? As for attractiveness of Athabasca reserves, they don't deliberately halt the supply (I think so). They just cannot move outside their skin. Not capable and that's all. Imagine a hypothetical situation where we are sure about the long lasting crisis say 1-2 years. Then the would consider building new oil rigs. But as we, they are sure that it's temporary shock eventually coming to end. So they have to double their current production to fit the bill (US demand for example to recover the deficit caused by Libya).

Regards
Tsotne
 
As i understood it, the following has been your argument:

$224 expected as before in 2008 crisis.

As for what can happen, well that will happen what already happened in 2008.

So I wanted to say that, if such trend keeps on going, then none of high quotes can be excluded.

The above post was about very long term horizon but I see you point. You should be considering short term speculation to trade futures and take advantage of price decrease in a month. The people shorting oil ETFs are actually betting against time, so they try to guess how much this destabilization is gonna last. Pessimistic people are (only for short time, very short, maybe for 3-4 days or a week) betting on it. You are talking about a month perspective when everything calms down then the price drops. Well there are investors who think so also but if the price now climbs to $250 for example (which wouldn't be a big surprise at all) then it might decrease and stay on $180 in a lucky case and not as you say.

Which is in contradiction to the more reasonable argument you are now presenting.

We both agree that the price is preparing for a drop.

Like the events triggered by 1973 I expect a permanent shift in benchmark price (I have been alluding to this the whole time).

In the short term, I believe the current price is overshot and a $224 price is unreasonable on the basis that there is no fundamental change in the planets oil reserves - simply short term fear over control and supply.

i prefer to be a contrarian in times of panic. When everyone and their grandmother is looking to buy, its my signal to get out.
 
I said that I don't see an upper bound for oil even to reach $224 and I can repeat it now. That was the opinion difference between us.
 
whereas most senior Christian leaders seem so remarkably dumb

Dominic,
To be fair, Rowan Williams is a man of some serious academic caliber when it comes to languages. I fear he is far too liberal for 90% of the Anglican communion outside of the UK and US though.
 
This is some trenchant writing from Michael Klare, whose two books ("Blood and Oil," and "Rising Powers, Shrinking Planet") I also recommend.

From 2005 to 2009, Saudis used about 2.3 million barrels daily, leaving about 8.3 million barrels for export. Only if Saudi Arabia continues to provide at least this much oil to international markets could the world even meet its anticipated low-end oil needs. This is not likely to occur. The Saudi royals have expressed reluctance to raise output much above 10 million barrels per day, fearing damage to their remaining fields and so a decline in future income for their many progeny. At the same time, rising domestic demand is expected to consume an ever-increasing share of Saudi Arabia's net output. In April 2010, the chief executive officer of state-owned Saudi Aramco, Khalid al-Falih, predicted that domestic consumption could reach a staggering 8.3 million barrels per day by 2028, leaving only a few million barrels for export and ensuring that, if the world can't switch to other energy sources, there will be petroleum starvation.

In other words, if one traces a reasonable trajectory from current developments in the Middle East, the handwriting is already on the wall. Since no other area is capable of replacing the Middle East as the world's premier oil exporter, the oil economy will shrivel -- and with it, the global economy as a whole.

Consider the recent rise in the price of oil just a faint and early tremor heralding the oilquake to come. Oil won't disappear from international markets, but in the coming decades it will never reach the volumes needed to satisfy projected world demand, which means that, sooner rather than later, scarcity will become the dominant market condition.
 
A bit exaggerated but he is very cynic man. Have you watched the whole interview? Claims that he has no any position.

Qaeda qaeda qaeda. :D

...That's not what I meant...............................................................
 
Yes that's because I sometimes search for something for example book links and after I have posted the promise then I post the outcome again. When the forum software was upgraded I had lost the "edit" command and had to comment on the mistake or something I needed to correct. @euroazn
 
Oh come on, put those student loans to some good use! Your word doesn't mean much on wall street if you're not willing to put your money behind it! ... make a bet that oil prices will go up!

Now I can tell you this: When the Egyptian revolt began, our professors and a monetary team from the central bank who conducted some lectures at the university were predicting the oil price jump in near future with the fear of Suez canal being closed. I spoke a lot about it in earlier posts. We (students) were only capable to construct the mathematical models and do anything in mathematical toolbox to predict the oil price. But the price was mainly fluctuating because of things not explained by mathematical modeling. And they assessed the political risks which couldn't be assigned any numerical value. We argued much and after "heavy fighting" decided to surrender to their arguments and say that there was a high possibility that the revolutionary spirit would be spread to neighboring countries and increase the oil price even much.

What I want to tell you by this is that we had a very high degree of confidence even at the time of Egypt revolt that the oil would increase by at least $30 per barrel . So if I could do that I would definitely bet on it. If I had a bank account now I would do it even now, even though there appeared some "artificial" barriers for oil to keep going up.

Are you interested in outcome?

People who believed that oil would behave such after Egypt alone, proved to have predicted it correctly and have made millions. Rudely put, person with $ 100 000 made $6 000 000 approx.

BTW, what have made a bet on? SCO alone?
 
yup, naked directional position at double leverage. As I mentioned, I don't have the cash to do anything too interesting.

I looked over some charts and it seems to inversely correlate to the price of the next month forward contract pretty well, so I'm satisfied.
 
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