Current Oil Price

fifthcolumn · Post by **fifthcolumn** » 10 Mar 2008, 18:11

This is not driven by supply and demand.
It's driven by speculators who KNOW something.

I'm a bit more than a little concerned that we might see a war-induced spike upwards sometime before this summer.

Andy Hunt · Post by **Andy Hunt** » 10 Mar 2008, 20:24

fifthcolumn wrote:This is not driven by supply and demand.
It's driven by speculators who KNOW something.

I'm a bit more than a little concerned that we might see a war-induced spike upwards sometime before this summer.

Hmm yes it is getting to that time of year . . . Middle Eastern wars always seem to happen around my birthday for some reason.

MacG · Post by **MacG** » 10 Mar 2008, 20:31

Andy Hunt wrote:
fifthcolumn wrote:This is not driven by supply and demand.
It's driven by speculators who KNOW something.

I'm a bit more than a little concerned that we might see a war-induced spike upwards sometime before this summer.
Hmm yes it is getting to that time of year . . . Middle Eastern wars always seem to happen around my birthday for some reason.

Middle east wars will be exercises in increasing futility.

skeptik · Post by **skeptik** » 10 Mar 2008, 20:35

fifthcolumn wrote:This is not driven by supply and demand.
It's driven by speculators who KNOW something.

Another interest rate cut in the USA? -> more downward pressure on the dollar. Seems likely. The financial system there seems to be imploding. The banks have declared open season on the hedge funds. "This market ain't big enough for the two of us"

ok... nails guesswork to mast... another FED rate cut within the next fortnight.

RenewableCandy · Post by **RenewableCandy** » 10 Mar 2008, 21:14

This is just getting silly. Price has gone from $106.5 to $108 while I've been on today!

Just out of interest I've looked up the exchange rate for Roubles: when I was last in Russia (2005) it was just under R50 to the ?, now it's pretty well exactly the same after having been made 'fully convertable' in 2006. So I kind of wonder what will happen next...

RevdTess · Post by **RevdTess** » 10 Mar 2008, 23:15

skeptik wrote: ok... nails guesswork to mast... another FED rate cut within the next fortnight.

Next Fed meeting is March 18, so I'd say you're almost certainly going to be correct.

RevdTess · Post by **RevdTess** » 10 Mar 2008, 23:18

RenewableCandy wrote:This is just getting silly. Price has gone from $106.5 to $108 while I've been on today!

Just imagine what hyperinflation must be like. (50% per month or more)
http://en.wikipedia.org/wiki/Hyperinflation

SunnyJim · Post by **SunnyJim** » 11 Mar 2008, 09:40

There's a very good article on the FT by Martin Wolf at the moment, and a very enlightening comment follows (by Philip K. Verleger, Jr)

http://blogs.ft.com/wolfforum/2008/03/l ... /#comments

The basis of this seems to be that investors are wanting paper backed by real commodities, which makes sense as so much distrust is abound regarding CDO's, SIV's and derivatives. There seems to be a huge amount of money finding it's way into the commodities market at the moment, which is forcing prices up way more than the simple supply/demand picture would have us think.

He tells of how one company alone CALPERS (pension funds?) is putting half its assets ($7 billion) into oil this week. They are not alone.

Looks like this huge increase we are seeing isn't so much about fundamentals at the moment. It's just a safer haven for the excess money sloshing about.

He likens the situation to the 1979 rush on silver (which I need to read up on). Anyone know how that ended?

Now, I'm not saying that peak oil isn't having a bearing on all this, it probably is. Demand is strong (from BRIC countries) and supply is difficult, but I think this flood of investment speculation or "Precautionary Demand" as Verleger terms it, is significantly distorting the market. How long this trend will continue is anyones guess, but it can only be a good thing in my view. It will give people a 'shock' that they really need, hopefully it will help make our societies more resilient to future high prices caused by real disconnects between supply and demand.

SunnyJim · Post by **SunnyJim** » 11 Mar 2008, 10:20

This could of course mean that what is really happening is that the investment in commodities is returning to more normal levels. Levels that would have been seen if greed hadn't caused so many fund manager and investors to chase huge gains from nonsense bits of paper.

RenewableCandy · Post by **RenewableCandy** » 11 Mar 2008, 10:22

Tess wrote:
RenewableCandy wrote:This is just getting silly. Price has gone from $106.5 to $108 while I've been on today!
Just imagine what hyperinflation must be like. (50% per month or more)
http://en.wikipedia.org/wiki/Hyperinflation

Hehe done it. Gone to Russia in 1993, one evening noticed nice affordable chandelier(!) in shop-window, whose location I noted, to come back the next day. On the next day it was still there: but the price (as marked on the ticket) had doubled overnight!

Well heck, I can do without chandeliers. But food...

RevdTess · Post by **RevdTess** » 11 Mar 2008, 10:41

Dollar falling through the floor again.

New WTI high: 109.19

emordnilap · Post by **emordnilap** » 11 Mar 2008, 10:59

fifthcolumn wrote:This is not driven by supply and demand.
It's driven by speculators who KNOW something.

Also, someone on here mentioned the smaller amount of tanker capacity being leased in the ME.

Edit: woo-hoo, Tapis $110.98, Bonny Light 110.13, 11 March 2008 10:03 GMT

SunnyJim · Post by **SunnyJim** » 11 Mar 2008, 11:05

Tess wrote: Dollar falling through the floor again.

New WTI high: 109.19

Unfortunately the pounds falling with it!!! Owch.... wonder what tomorrows budget will bring?

Why is the pound falling so fast when the BoE a holding rates steady? Is it speculation that they will have to lower them in April? Have there been some bad UK figures?

RenewableCandy · Post by **RenewableCandy** » 11 Mar 2008, 11:25

SunnyJim wrote: Why is the pound falling so fast when the BoE a holding rates steady? Is it speculation that they will have to lower them in April? Have there been some bad UK figures?

We tend to track the dollar, for some reason which eludes me at the mo. I thought it was 'cause we do so much business with the US of A, but actually we do more with the EU. Can anyone elighten us?

Joules · Post by **Joules** » 11 Mar 2008, 11:33

SunnyJim wrote: Anyone know how that ended?

http://en.wikipedia.org/wiki/Silver_Thursday has a little bit about it. There's more on the web - it was commonly known as the Bunker Hunt Crisis.

Nelson Hunt declared bankruptcy and was convicted in 1988 for trying to corner the market in silver through International Metals Investment Company Limited