Current Oil Price

RevdTess · Post by **RevdTess** » 27 Jun 2008, 17:16

deleted.

RevdTess · Post by **RevdTess** » 27 Jun 2008, 17:20

Hey, look, guys, if I appear to be contradicting myself, please don't attack me. I'm not the enemy - I'm trying to explain how the market works. If it seems crazy, it's because it is crazy, but that doesnt make it less true. I swear I didn't contradict myself earlier. We do know what's going on. We dont know what will break next, therefore we dont know where the price will go. I'm not trying to be funny - this is how the market works!

Vortex · Post by **Vortex** » 27 Jun 2008, 17:23

Andy Hunt · Post by **Andy Hunt** » 27 Jun 2008, 17:24

I understand what you're saying Tess, it's not that you guys don't know what's going on, it's that your knowledge about what is going on is applied in a very tight time-frame, where the dynamics of the situation change by the minute.

After all, if long-term predictions were that easy, then wouldn't oil traders be running the world's economy . . . ?

Am I getting warm?

RevdTess · Post by **RevdTess** » 27 Jun 2008, 17:28

Andy Hunt wrote:I understand what you're saying Tess, it's not that you guys don't know what's going on, it's that your knowledge about what is going on is applied in a very tight time-frame, where the dynamics of the situation change by the minute.

After all, if long-term predictions were that easy, then wouldn't oil traders be running the world's economy . . . ?

Am I getting warm?

right, right. that's it. thanks

This is why it's so hard to trade off a 'peak oil' view. Even if you think supply has peaked, what if demand drops faster still? You can only take it one day at a time. Even if you forecast supply and demand there is continuous feedback from prices - every $1 price change rebalances the system and changes the forecasts. And that doesnt take into account the impact of new refineries, price subsidies, fuel switching (eg to/from gas), cartel action, US govt SPR activity, regulatory activity, refinery accidents, strikes, pipeline explosions, equity collapse, currency depreciation, interest rate changes etc etc etc all of which can strike at any time with any number of impacts. It's a brave or foolhardy soul who thinks they can ignore all this and just buy on a belief in peak oil. I'm not saying it's wrong but at the same time economic failure around the world could easily take us to $60 before we see $200. Can anyone figure that out? If they can, then they deserve their billions. For the rest of us, predicting tomorrow has got to be enough.

Adam1 · Post by **Adam1** » 27 Jun 2008, 18:11

Andy, Tess - great pair of posts. Tess, if you have time, an extended piece on this it would make an interesting read. It would make a great Oil Drum article.

Mitch · Post by **Mitch** » 27 Jun 2008, 18:46

Ah - looks like Tess has knocked off and Mike's down in the woods - it's trying to do it again - 142.89

Adam1 · Post by **Adam1** » 27 Jun 2008, 18:49

Mitch wrote:Ah - looks like Tess has knocked off and Mike's down in the woods - it's trying to do it again - 142.89

Ah the mysteries of complex systems.

RenewableCandy · Post by **RenewableCandy** » 27 Jun 2008, 19:00

Perhaps it all does depend on whether Mike's down the woods. Perhaps some speculator's watching Mike for clues...

some joker wrote:Somewhere in the USA, a local amateur weatherman was always, uncannily, accurate. After years of his predictions saving various local farmers' crops from being totalled by rain- and hail-storms, the farmers clubbed together and threw a party for him. Towards the end of the evening, he told them his secret: his daily trip to work took him past part of a local Indian reservation, and if they weren't out in front of their wigwams tanning their leather, he knew bad weather was coming.

Some enterprising soul remembered this story, and paid the Indians a visit to ask them how they knew a storm was coming. They said: we listen to the weather forecast, like everyone else...

MacG · Post by **MacG** » 27 Jun 2008, 19:15

It occurs to me that this "market" thing act like water in a river flowing from the mountains to the sea. Always seeking the lowest point to flow to. Sometimes there are obstructions and the river meanders and goes sideways or even back again for short distances, sometimes it's a straight path, sometimes it's a waterfall. When sitting in a small boat just flowing with the river, it can be difficult to see any kind of "big picture" - specially in the rapids.

Based on an attempt at "the big picture" and some physical fundamentals, I think gasoline prices are still ridiculously low! When filling up a normal car, we get the utility of some 20 marathon runs out of it. In air conditioned comfort. If we put four people in the car, we get the equivalent of 80 marathon runs out of a full tank. Together with 20-30 kg of luggage for every person.

Now, go out and make ONE marathon run with a 25 kg backpack, and come back and tell me what it would be worth to ride in comfort for another 79 marathons.

I think that ?50 per liter would still be considered as pretty cheap. Will take one person some 50 km in less than an hour on Skeptik's ANF 125.

Sure, the river can still make many turns, but the overall direction and destination should be pretty obvious.

skeptik · Post by **skeptik** » 27 Jun 2008, 19:19

Tess wrote:Hey, look, guys, if I appear to be contradicting myself, please don't attack me. I'm not the enemy - I'm trying to explain how the market works. If it seems crazy, it's because it is crazy, but that doesnt make it less true. I swear I didn't contradict myself earlier. We do know what's going on. We dont know what will break next, therefore we dont know where the price will go. I'm not trying to be funny - this is how the market works!

Tess, please dont think I'm impugning your professional abilities. I'm sure you understand the markets just as well as any professional meteorologist understands the weather.

"the market can stay irrational longer than you can stay solvent."
John Maynard Keynes

jcw · Post by **jcw** » 27 Jun 2008, 19:38

MacG wrote:It occurs to me that this "market" thing act like water in a river flowing from the mountains to the sea. Always seeking the lowest point to flow to. Sometimes there are obstructions and the river meanders and goes sideways or even back again for short distances, sometimes it's a straight path, sometimes it's a waterfall. When sitting in a small boat just flowing with the river, it can be difficult to see any kind of "big picture" - specially in the rapids.

A nice and even poetic description.

MacG wrote: Based on an attempt at "the big picture" and some physical fundamentals, I think gasoline prices are still ridiculously low! When filling up a normal car, we get the utility of some 20 marathon runs out of it. In air conditioned comfort. If we put four people in the car, we get the equivalent of 80 marathon runs out of a full tank. Together with 20-30 kg of luggage for every person.

Now, go out and make ONE marathon run with a 25 kg backpack, and come back and tell me what it would be worth to ride in comfort for another 79 marathons.

I think that ?50 per liter would still be considered as pretty cheap. Will take one person some 50 km in less than an hour on Skeptik's ANF 125.

Sure, the river can still make many turns, but the overall direction and destination should be pretty obvious.

I keep telling people on other sites that oil and petrol are cheap when you consider how useful they are.

At what price will people stop buying? Now that's a conundrum.

Andy Hunt · Post by **Andy Hunt** » 27 Jun 2008, 19:40

RenewableCandy wrote:Perhaps it all does depend on whether Mike's down the woods. Perhaps some speculator's watching Mike for clues...

Personally I'm beginning to suspect that the Hokey Cokey really is what it's all about.

Mitch · Post by **Mitch** » 27 Jun 2008, 20:14

I'm getting almost convinced that either somebody has a button, or the traders do something collectively. Round dollars seem to be a "marker", and all time high round dollars apear to be especially disliked.
Yesterday, as it approached 140, the price dropped quite a bit. Today, as it approached within cents of 143, it tanked 3 dollars in a few minutes - almost as if someone says "That's enough now boy's 'n girls, time to chuck a bucket of water on this party" - and presto, couple of dollars drop and we all settle down at the lower price for a few hours. It seems like only the real sudden spikes up catch them off-gaurd. It also seems like thier fire extinguisher is not too big and takes time to re-fill - if the price rises again too quickly, they don't appear to be able to blast the flames again for a while, so they wait for the next "round dollar".

Vortex · Post by **Vortex** » 27 Jun 2008, 20:20

Computer driven sell orders. Down we go in an instant ...