Current Oil Price

hardworkinghippy · Post by **hardworkinghippy** » 28 May 2008, 22:07

I have the same problem Vertis.

I imagine most people who have been thinking about Peak Oil for some time want to confirm that yes, this is it.

I could be nuts of course.

RevdTess · Post by **RevdTess** » 29 May 2008, 01:29

To comment on the 'amount of speculation in the oil price' as you knew I must:-

It's not really something I worry about too much. I mean, you could for example calculate the number of $billions invested in speculative investment instruments such as the GSCI index - and it's quite a few believe me. And then you could calculate how many contracts of oil futures this represents, and then consider how far the price might move if this number of contracts needed to be sold in a hurry. But it's all very arbitrary.

In fact a big speculative influx could move prices up $10 in three days, while the same amount of money leaving the market might move us down only $2. It depends on the level of panic induced by the trading patterns and how close we are to technical chart support and resistance levels, and what else is going on in the world of fundamentals and geopolitics.

So figuring how much of the oil price is speculation is really an example of calculating how many angels can dance on the head of a pin. It's all a bit of a daft conversation really. All we need to understand is that increased amounts of money entering or leaving the market (whether managed by a bank or a hedge fund or an oil major) is going to increase the volatility of prices.

emordnilap · Post by **emordnilap** » 29 May 2008, 09:35

Your explanation demonstrates why you're in that business and the likes of me aren't, Tess.

Vertis · Post by **Vertis** » 29 May 2008, 10:58

I guess that for those of is outside the business, each new temporary high piques the interest a little more, along with the ensuing media frenzy.

I know I have to take a step back and think, "stop looking at the hourly graph, look at the annual one". Perhaps it's another symptom of our addiction to immediacy?

PS_RalphW · Post by **PS_RalphW** » 29 May 2008, 16:40

I do not understand the market. US stock report showed a draw of 8M barrels, price jumps 3 dollars to $132, OK. One our later, it crashes to $128.

Why?

I'm giving up on this! Tess is the expert.

snow hope · Post by **snow hope** » 29 May 2008, 16:46

currently 130.93 - what happened to the big price drop?

PS_RalphW · Post by **PS_RalphW** » 29 May 2008, 16:55

The ticker has a 1/2 or 1 hour delay...

Vortex · Post by **Vortex** » 29 May 2008, 16:57

RalphW wrote:The ticker has a 1/2 or 1 hour delay...

Is actually $128.18

emordnilap · Post by **emordnilap** » 29 May 2008, 17:10

Between this:

snow hope wrote:currently 130.93 - what happened to the big price drop?

and this:

Vortex wrote:Is actually $128.18

The ticker went up! To $131.62.

biffvernon · Post by **biffvernon** » 29 May 2008, 18:46

RalphW wrote:Why?

Because.

Often things just are. There is no because.

Read Taleb's Black Swan.

Totally_Baffled · Post by **Totally_Baffled** » 29 May 2008, 19:21

Inventories drop and the price falls by over $3!

I am glad Tess understands all this , I would be bankrupt in a week if I traded oil!

biffvernon · Post by **biffvernon** » 04 Jun 2008, 11:54

(Bump)

Going cheap, buy now while stocks last.

PS_RalphW · Post by **PS_RalphW** » 04 Jun 2008, 12:11

Latest US stocks report will be issued at 3:35pm BST. If the predictions at PO.com are accurate, price will rised a couple of dollars in short order.

An assessment by a trader posting on theOilDrum is that WTI (the quoted price on this page) is currently being driven down by speculators on the assumption that demand will fall in the coming recession.

biffvernon · Post by **biffvernon** » 04 Jun 2008, 14:08

Good to know that whichever way it goes we can blame the speculators.

PS_RalphW · Post by **PS_RalphW** » 04 Jun 2008, 15:47

Crude stocks down, but petrol and diesel up, little net change in US stocks this week, thanks to higher than usual petrol imports. Price spiked up, then down, now drifting little changed.

apocalypse postponed