OPEC - The reason for energy independence.

[Clove]

Oil rises as Saudi Arabia nixes Bush plea
The OPEC nation rejects calls from the President to increase production as oil reaches a new record near $128 a barrel.


NEW YORK (CNNMoney.com) -- Oil prices surged nearly $3, reaching a record high of almost $128 a barrel Friday as Saudi Arabia rejected President Bush's call to increase production.

According to the White House, Saudia Arabia doesn't see enough demand to increase production.

President Bush met with Saudi Arabia's King Abdullah on Friday as part of his Middle East tour to appeal for greater production to help quell crippling fuel prices.

Crude began to rise earlier in the day after traders foresaw a jump in diesel fuel use following the earthquake in China and Goldman Sachs revised its price outlook sharply higher.

Oil prices: U.S. crude for June delivery was up $2.96 a barrel to $127.08 on the New York Mercantile Exchange. Earlier, crude hit $127.82, topping the previous intraday record of $126.98 set Tuesday. Last Friday, oil closed at a record $125.96 a barrel.

"Everything the market looks at is bullish," Peter Beutel, an oil analyst at Cameron Hanover, wrote in a research note Friday.

Traders fear that the rebuilding after the 7.9 magnitude earthquake that rocked southwest China Monday - and killed more than 20,000 people with tens of thousands of others still missing - will lead to a sharp increase in diesel fuel use, the Associated Press reported.

Rocketing fuel: Diesel fuel has been in tight supply for the last several months following a cold winter in the Northern Hemisphere, and as the popularity of diesel cars grows in Europe and the developing world.

With diesel prices outpacing gasoline, refiners in the United States have been ramping up production of diesel and sending it abroad. That has displaced some domestic gasoline production, helping push gas prices higher.

The price of diesel fuel hit a new record high Friday of $4.482 a gallon, according to a daily survey from AAA. Regular unleaded gasoline also reached a new record of $3.787 a gallon.

Goldman Sachs weighs in: Also contributing to Friday's oil price spike: analysts at the investment bank Goldman Sachs boosted their oil price predictions for the second half of the year from $107 to $141 a barrel.

"Supply constraints continue to push crude prices higher," Goldman analysts wrote in a research note Friday.

But the bank noted that despite the high prices, the global economy - and by implication, the demand for oil - continues to grow.

"The dire macroeconomic impact from the current oil shock has yet to materialize," the note said

http://money.cnn.com/2008/05/16/markets/oil/index.htm?eref=rss_topstories

[Parkbandit]

Cut off all aid to OPEC nations until they increase production.

[Daniel]

Lol.

OPEC countries get very little money in AID from us.

[Clove]

Lol.

OPEC countries get very little money in AID from us.Unless you count our oil purchases.

[Gan]

OPEC - ugh, monopolies. The scourge of capitalism.


Will America continue to take it on the chin with gas prices?

Will America revise consumption behaviors to compensate for the higher prices?

Will America be the first to breakthrough with an efficient substitute good for petrolium fuel?

Stay tuned to find out...

[Daniel]

Unless you count our oil purchases.

Yea. We'll stop buying oil. That'll be productive.

[Clove]

Then again 1/2 of Saudi's air force is comprised of US manufactured aircraft.

[Clove]

Yea. We'll stop buying oil. That'll be productive.I'm glad you agree. Maybe THAT'S why there's a push for energy independence!!11!1!!1!

[Daniel]

Then again 1/2 of Saudi's air force is comprised of US manufactured aircraft.

Just as their Army is composed primarily of US vehicles and weapons.

That of course is a non point because we're not going to stop *selling* them weapons either.

[halfling]

lets just do it the old fashioned way and invade.
lets go from being in shit up to our waist, up to our necks...
or are we already at the neck?

[Clove]

Just as their Army is composed primarily of US vehicles and weapons.

That of course is a non point because we're not going to stop *selling* them weapons either.We're not, but we could. What was your point again?

[Tsa`ah]

Cut off all aid to OPEC nations until they increase production.

Aid has been addressed .... production on either end is pretty much maxed out, which is why supply vs demand is nearly an absolute rule at this point.

We can make threats until we're blue in the face .... in the end they know China and India will pick up the slack and pay any price in doing so.


OPEC - ugh, monopolies. The scourge of capitalism.

Give a man a fish ...


Will America continue to take it on the chin with gas prices?

Signs point to yes.


Will America revise consumption behaviors to compensate for the higher prices?

To an extent we did. One of the few things that came out of the Nixon administration was the national speed limit as a response and future preventive measure for future production shortages.

Administrations up to the point of Clinton resisted repealing the national speed limit. With Clinton (hindsight being 20/20) we were witness to the two most destructive forces to the domestic economy ... chucking a tried and true method of fuel conservation and NAFTA. Neither of which Hillary would like to claim as experience.


Will America be the first to breakthrough with an efficient substitute good for petrolium fuel?

Other nations have beat us to the punch and we're still failing at the most basic levels (infrastructure).

[Tsa`ah]

We're not, but we could. What was your point again?

That your point was lacking ... severely.

[Daniel]

We're not, but we could. What was your point again?

That the US has no leverage with OPEC nations, so suggesting that we apply leverage to get our way (as opposed to say..changing our habits) is retarded.

[Clove]

That the US has no leverage with OPEC nations, so suggesting that we apply leverage to get our way (as opposed to say..changing our habits) is retarded.Speaking of retarded, did you read the title of the thread? Sorta makes me the first person to suggest changing our habits doesn't it. And of course we have leverage in OPEC nations.

[Clove]

Aid has been addressed .... production on either end is pretty much maxed out, which is why supply vs demand is nearly an absolute rule at this point.Wrong (as usual).


That your point was lacking ... severely.


That the US has no leverage with OPEC nations, so suggesting that we apply leverage to get our way (as opposed to say..changing our habits) is retarded.Intrestingly, despite Daniel's estimation to the contrary, that's exactly the kind of leverage being considered on Capitol Hill
That's why some Democrats in Congress, including New York Sen. Charles Schumer, are threatening to hold up a $1 billion-plus arms deal for the Saudis, a crucial ally in the global war on terror, unless the kingdom puts more oil on international markets.

"We are saying to the Saudis that if you don't help us, why should we be helping you?" Schumer said this week.

[Daniel]

Speaking of retarded, did you read the title of the thread? Sorta makes me the first person to suggest changing our habits doesn't it. And of course we have leverage in OPEC nations.

I was responding to PB. Hence my reference to foreign aid.

I don't think we have much leverage to get OPEC countries to produce more oil. If you have a brilliant idea, feel free to let me know then please inform the government.

[Parkbandit]

I was responding to PB. Hence my reference to foreign aid.

I don't think we have much leverage to get OPEC countries to produce more oil. If you have a brilliant idea, feel free to let me know then please inform the government.


Aid doesn't always just include handing over money or supplies. There is plenty that the Saudis purchase from us that we could start putting some stipulations on.

[Daniel]

Wrong (as usual).



Intrestingly, despite Daniel's estimation to the contrary, that's exactly the kind of leverage being considered on Capitol Hill

Feel free to gloat when this actually happens and the oil starts flowing.

My prediction is that the Saudi's will say "Alright" and simply buy their military technology elsewhere. It's not as if we don't flood the market with our arms anyway.

Then, if we keep posturing they'll just racket down production just to show us whats up.

Remember the oil rationing of the 1970's? How well did that work out for us?

[Daniel]

Aid doesn't always just include handing over money or supplies. There is plenty that the Saudis purchase from us that we could start putting some stipulations on.

That's not "Aid". That is "trade".

So..yea.. That's productive. Let's hurt our own economy and pray to god that they don't start looking elsewhere for the same goods.

Globalization is a wonderful thing.

[Parkbandit]

So Daniel.. what is your answer then? You always seem to be able to shoot down other posts, without actually providing any solutions.

[Tsa`ah]

Wrong (as usual).

Oy .... you are a tard of the highest magnitude. I'm not even going to ask you to back up that claim. I'll just do you the favor and set the shit at chin level for convenience.

http://www.mindfully.org/Energy/2004/Oil-Global-Demand22mar04.htm

We have been at or as close to peak production for a while now ... 2008 calling Clove .... 2008 .... Clove.


Intrestingly, despite Daniel's estimation to the contrary, that's exactly the kind of leverage being considered on Capitol Hill

Actually not numb nuts ... do you think we're the only nation knocking on their door with arms sales? If China and India are more than willing to pick up the purchasing slack .... don't you think that at least China will be all too willing to trade arms for our share of the fuel market?

"Focus"

If not China, I'm sure even you are capable of rattling off at least four other nations that would be willing to enter into arms deals.

Please us that head for something other than spreading your ass cheeks.

[Clove]

Feel free to gloat when this actually happens and the oil starts flowing.Look man, you're the one who said "we weren't going to stop selling them arms" when in fact, that's exactly what Congress is considering. I think that gives me some gloating rights.

[Daniel]

So Daniel.. what is your answer then? You always seem to be able to shoot down other posts, without actually providing any solutions.



I've already offered it elsewhere. Your response was something like "Well, it only worked in Europe because they have less people", which was of course false.

But to reiterate:

Tax the fuck out of Gas until people get the hint and start changing their consumption patterns. Funnel the increased revenues into research and building the neccessary infrastructure to use sustainable fuel sources.

Playing hard ball with OPEC to increase production is a bandaid which doesn't even promise to soothe the suffering, let alone fix it.

[Clove]

Oy .... you are a tard of the highest magnitude. I'm not even going to ask you to back up that claim. I'll just do you the favor and set the shit at chin level for convenience.

http://www.mindfully.org/Energy/2004/Oil-Global-Demand22mar04.htm

We have been at or as close to peak production for a while now ... 2008 calling Clove .... 2008 .... Clove.That's exactly what I'll do retard bring you into 2008, because the Saudis have expanded their production capacity by nearly a billion barrels since (drum roll please) 2005.


So what have the Saudis done since 2005, when oil prices climbed above $70 a barrel, then $80, then $90, and this year broke the once-unthinkable threshold of $100? They have increased production capacity, meaning that in a pinch they could make up the difference between global demand and available supply. They now can produce 11 million barrels per day, or bpd, and expect that number to reach 12.5 million bpd by 2010.

"They've not only invested tens of millions of dollars to increase production capacity. They've increased their actual production from 8.5 million barrels per day (mbpd) to 9.2 mbpd," said Frank Verrastro, director of the energy and national-security program at the Center for Strategic and International Studies, a center-right think tank.

His numbers are somewhat squishy; actual production numbers are hard to verify. Some critics believe the Saudi government has increased capacity but actually dropped output by 1 million bpd over the past two years. The Energy Information Administration, the statistical arm of the Energy Department, said that in 2006 — the last full year for which it has data — the Saudis produced 10.7 million bpd.

[Daniel]

Look man, you're the one who said "we weren't going to stop selling them arms" when in fact, that's exactly what Congress is considering. I think that gives me some gloating rights.

Like I said, talk to me when that actually happens.

[Parkbandit]

I've already offered it elsewhere. Your response was something like "Well, it only worked in Europe because they have less people", which was of course false.

Are you lik 100% positive that was my response?



But to reiterate:

Tax the fuck out of Gas until people get the hint and start changing their consumption patterns. Funnel the increased revenues into research and building the neccessary infrastructure to use sustainable fuel sources.

Playing hard ball with OPEC to increase production is a bandaid which doesn't even promise to soothe the suffering, let alone fix it.


Oh.. so you want to completely decimate our economy to bring about change. Didn't you JUST use that as a reason NOT to stop all aid to them that I proposed? I'm pretty sure your great idea would cause far more damage to our economy.

[Tsa`ah]

That's exactly what I'll do retard bring you into 2008, because the Saudis have expanded their production capacity by nearly a billion barrels since (drum roll please) 2005.

Well that covers less than 50 days of our annual consumption .... got anything else?

[Gan]

Tax the fuck out of Gas until people get the hint and start changing their consumption patterns. Funnel the increased revenues into research and building the neccessary infrastructure to use sustainable fuel sources.

Playing hard ball with OPEC to increase production is a bandaid which doesn't even promise to soothe the suffering, let alone fix it.

It would be political suicide to propose an increase in gas tax. You think Paul Volker was hated... try adding to the gas tax. Politicians will placate, beat on chests, present token solutions and say its out of their hands as prices continue to rise. No tax will be necessary, just let OPEC continue to hold the controls on supply and price and eventually the change we need will be forced through greater and greater substitute seeking behavior and the demand for substitutes that behavior will cause. Money will be the most influential market changing catalyst, the key is to make the bad guy OPEC or petrol fuel in general... not the government or the politicians. Because bottom line is politicians fall back into survival mode long before the good of the public is considered.

[Tsa`ah]

Oh.. so you want to completely decimate our economy to bring about change. Didn't you JUST use that as a reason NOT to stop all aid to them that I proposed? I'm pretty sure your great idea would cause far more damage to our economy.

We don't provide aid and there's absolutely nothing we can do short of reducing demand that will have any impact on OPEC .... even at that point we won't have an impact because we are one part of a global market.

[Clove]

Well that covers less than 50 days of our annual consumption .... got anything else?You failed in Econ 101, didn't you?

[Keller]

Tax the fuck out of Gas until people get the hint and start changing their consumption patterns. Funnel the increased revenues into research and building the neccessary infrastructure to use sustainable fuel sources.

Playing hard ball with OPEC to increase production is a bandaid which doesn't even promise to soothe the suffering, let alone fix it.

I agree 100% and have been saying since at least 2001 that we need to tax the fuck out of gas. Not only can we put that revenue into R&D -- but it will also put political pressure on metropoli to improve public transportation. The city of Los Angeles STILL does not have any sort of reliable public transportation (subway or light rail) from the west side of the city. So if you live on the west side and want to go to work somewhere else -- you have to drive. If you live anywhere in the city and work on the west side -- you have to drive. It's sort of fucked up.

[Gan]

With the level of populism rampant in America during election season. A Gas Tax would not survive the day.

We have to find another way.

[Tsa`ah]

You failed in Econ 101, didn't you?

Didn't bother taking it ... LA&S. My econ class has been life.

Now, I'm not exactly sure what you're not able to grasp here but our annual national consumption in 2006 was 20,687,000 bpd. 58.2% of that is represented by imports.

I'm not sure what reality you're choosing to live in, but if we dumb it down for you and say our consumption is 20 mill bpd and the Saudis have expanded their capacity by 1 billion bpy ... that's 50 days assuming every barrel of increased production is making it's way to the US .... which it is not.

Care to try again or are you actually able to explain yourself?

[Clove]

Didn't bother taking it ... LA&S. My econ class has been life.It shows.


Now, I'm not exactly sure what you're not able to grasp here but our annual national consumption in 2006 was 20,687,000 bpd. 58.2% of that is represented by imports.At least you're up to 2006 now.


Care to try again or are you actually able to explain yourself?OPEC nations specifically Saudi Arabia have been increasing surplus (that means more than needed) production capacity since 2005. When surplus production capacity is increased (supply) it has a lowering effect on prices. But as I demonstrated in other threads this isn't about supply and demand. Oil prices are being driven by a weak US dollar combined with over-speculation. Energy experts agree that based on supply and demand curves oil prices should be between 60-80 dollars a barrel.

Now that we have you in 2006, let's bring you in 2008 where oil demand is expected to drop by 190k barrels a day. Pop question! Is this an INCREASE or a DECREASE in demand?

[Daniel]

Are you lik 100% positive that was my response?




Oh.. so you want to completely decimate our economy to bring about change. Didn't you JUST use that as a reason NOT to stop all aid to them that I proposed? I'm pretty sure your great idea would cause far more damage to our economy.

It won't destroy our economy. It will just force it to change to adapt to the reality of the new world. It will accomplish the same thing that time will, but instead of slow rolling the process it'll just expedite it. The bonus of this is that we don't spend a decade or so dicking around with our foreign policy or falling behind the rest of the world.

Europe did this a long time ago and last time I checked they were doing a lot better then we are.

[Tsa`ah]

It shows.

At least you're up to 2006 now.

OPEC nations specifically Saudi Arabia have been increasing surplus (that means more than needed) production capacity since 2005. When surplus production capacity is increased (supply) it has a lowering effect on prices. But as I demonstrated in other threads this isn't about supply and demand. Oil prices are being driven by a weak US dollar combined with over-speculation. Energy experts agree that based on supply and demand curves oil prices should be between 60-80 dollars a barrel.

Now that we have you in 2006, let's bring you in 2008 where oil demand is expected to drop by 190k barrels a day. Pop question! Is this an INCREASE or a DECREASE in demand?

12 .... that'll do pig.

FYI you failed to provide any evidence of a surplus .... nor were you able to disprove the facts presented.

[Gan]

My econ class has been life.

This needed to be preserved.

:lol:

[Clove]

12 .... that'll do pig.

FYI you failed to provide any evidence of a surplus .... nor were you able to disprove the facts presented.I'm sorry if you can't understand "surplus oil production". The data is out there, Google it up.

[Daniel]

It would be political suicide to propose an increase in gas tax. You think Paul Volker was hated... try adding to the gas tax. Politicians will placate, beat on chests, present token solutions and say its out of their hands as prices continue to rise. No tax will be necessary, just let OPEC continue to hold the controls on supply and price and eventually the change we need will be forced through greater and greater substitute seeking behavior and the demand for substitutes that behavior will cause. Money will be the most influential market changing catalyst, the key is to make the bad guy OPEC or petrol fuel in general... not the government or the politicians. Because bottom line is politicians fall back into survival mode long before the good of the public is considered.

What substitute behavior?

Making OPEC the enemy does what? America will still be dependent on oil.

Notice how we still buy oil from Venezuela and yet I doubt you'll find many people in this country with love for Hugo Chavez.

As long as the United States Government is unwilling to commit itself to facilitating this "subsitute" behavior, it won't happen.

It's all about infrastruture. Who do you think built the highway system? Private businesses?

No, businesses simply capitalize on the environment that is infront of them. It's the job of the government to set the environment.

[Daniel]

It shows.

At least you're up to 2006 now.

OPEC nations specifically Saudi Arabia have been increasing surplus (that means more than needed) production capacity since 2005. When surplus production capacity is increased (supply) it has a lowering effect on prices. But as I demonstrated in other threads this isn't about supply and demand. Oil prices are being driven by a weak US dollar combined with over-speculation. Energy experts agree that based on supply and demand curves oil prices should be between 60-80 dollars a barrel.

Now that we have you in 2006, let's bring you in 2008 where oil demand is expected to drop by 190k barrels a day. Pop question! Is this an INCREASE or a DECREASE in demand?

Ever hear of the concept of "Sticky prices"?

[Tsa`ah]

This needed to be preserved.

:lol:

Then do you care to explain how someone is able to arrive at the conclusion that OPEC, specifically the Saudis, are producing a surplus? I can't seem to find it.

Could you also explain how expanding production by 1bil pby is going to the slightest impact on current fuel prices?

Could you also explain why any business is going to prefer one paying customer with demands over other customers that just say "load it up"?

I'm reading some pretty dumb ass remarks .... but nothing to refute anything I posted to any degree. Maybe the "lols" are convincing some idiot somewhere, but they're not a very convincing reply ... where's the data?

[Clove]

Then do you care to explain how someone is able to arrive at the conclusion that OPEC, specifically the Saudis, are producing a surplus? I can't seem to find it.


The oil supply system continues to operate at near capacity and remains vulnerable to both actual and perceived supply disruptions. The supply and demand balance for the remainder of the year is tighter than in last month’s Outlook. World oil markets are particularly tight during the first half of 2008, with year-over-year growth in world oil consumption outstripping growth in non-Organization of the Petroleum Exporting Countries (OPEC) production by over 1 million bbl/d. The combination of rising global demand, fairly normal seasonal inventory patterns, slow gains in non-OPEC supply, and low levels of available surplus production capacity is providing firm support for prices.

The flow of investment money into commodities markets and ongoing geopolitical concerns in a number of producing countries, including Nigeria, Iraq, and Venezuela, have contributed to crude oil price volatility. OPEC appears satisfied with current market conditions, given recent statements by some members, suggesting that there are no plans to review OPEC production until the next scheduled meeting on September 9th. Also weighing on market expectations is Saudi oil minister Naimi’s public statement suggesting no need to add production capacity beyond the announced plan to expand Saudi oil production capacity to 12.5 million bbl/d by 2009.

If non-OPEC production rises as expected and some OPEC members add production capacity as planned, surplus crude oil production capacity should increase and ease upward price pressures by early next year. The expected surplus capacity, however, is less than projected in last month’s Outlook.

Consumption. World oil consumption is projected to grow by 1.2 million bbl/d in 2008. Almost all of the growth in 2008 is expected to come from the non-Organization for Economic Cooperation and Development (OECD) countries, led by China, Middle East oil producing countries, and Russia, as well as Brazil and India (World Oil Consumption). China’s oil consumption is expected to rise by 0.4 million bbl/d in 2008, with Chinese oil imports in March showing an increase of 0.8 million bbl/d from year-earlier levels. OECD oil consumption is projected to remain relatively unchanged, with growth in consumption in Europe, where weather factors constrained oil consumption in 2007, offsetting declines in the United States.

Non-OPEC Supply. Non-OPEC supply is forecast to rise by 0.6 million bbl/d in 2008, about the same as in last month’s Outlook. Upward revisions in Africa and the United States offset lower expectations for growth in Russia and the North Sea. Brazil, Azerbaijan, and Sudan are expected to account for most of the increases in production in 2008, while the United Kingdom, Mexico, and Norway are among countries expected to experience declines (Non-OPEC Oil Production Growth). Russian oil production in the first quarter averaged 80,000 bbl/d below levels from first-quarter 2007, the first year-over-year decline this decade. However, EIA expects this to be temporary, with Russian production expected to grow on average in 2008. Most of the non-OPEC supply growth in 2008 is expected in the second half of the year, in contrast to very little growth in the first half of the year. Given recent history, EIA recognizes that the pace and timing of non-OPEC supply growth will continue to be subject to possible delays in key projects and accelerating production declines in some older fields. Thus, net production increases could be less than the current forecast.

OPEC Supply. OPEC crude oil production averaged about 32.2 million bbl/d during the first quarter of 2008. Only Saudi Arabia has significant surplus production capacity, currently estimated to be about 1.9 million bbl/d. OPEC crude oil production is expected to remain relatively flat through the third quarter of 2008, though there is the possibility of either higher or lower output in Iraq and Nigeria, depending on how the security situation in each country evolves. EIA expects that OPEC surplus production capacity will not grow significantly until the end of 2008 and will stay concentrated in Saudi Arabia (OPEC Surplus Oil Production Capacity).

Inventories. OECD commercial inventories at the end of the first quarter stood at an estimated 2.54 billion barrels, 22 million barrels above the previous 5-year average level. OECD inventories recorded a seasonal decline during the first quarter of roughly 0.3 million bbl/d, about 0.1 million bbl/d less than the average withdrawal rate during the first quarter. EIA’s projected balances suggest that total OECD commercial inventories likely will remain near average levels for the rest of the year (Days of Supply of OECD Commercial Stocks).You suck at research. Now I know you have problems with numbers above 20 so I'm going to walk you through it.

Estimated Consumption Increase in 2008: 1.2 Million bbl/d
Estimated Production Increase (non-OPEC): .6 Million bbl/d
Estimated Production Increase (OPEC): 1.9 Million bbl/d
Total World Surplus Production: 1.3 Million bbl/d

If you notice there's a lot of discussion about the declining increased production amongst non-OPEC states. This is a concern because they are the "swing states" of oil, unfortunately most of the surplus is in Saudi Arabia.

I won't bore you with the 2009 projections but I can tell you that an even greater surplus is projected then.

[Daniel]

You guys are just arguing terminology.

Opec countries have increased their *Capacity* for production, but they are not producing more. I find it doubtful that they actually would.

[Tsa`ah]

http://www.eia.doe.gov/basics/quickoil.html

[Gan]

What substitute behavior?
Any behavior that does not use petrolium. Remember, we're trying to stimulate substitute behavior/goods in lieu of the status quo.


Making OPEC the enemy does what? America will still be dependent on oil. Notice how we still buy oil from Venezuela and yet I doubt you'll find many people in this country with love for Hugo Chavez. Since you work for the state department, I'm suprised you have to ask this question. If the American public feels pinched by the evil OPEC producer members (countries) then it has everything to do with foreign policy, which is usually dictated through our elected officials.


As long as the United States Government is unwilling to commit itself to facilitating this "subsitute" behavior, it won't happen.
You wont find a politician who'll risk his political future and electability by comitting itself to instigating this behavior. The only way the Federal Reserve got away with it was because the Chairman of the Fed is not a publically elected official. He's appointed, ask Carter about the payback he received for appointing Volker. ;) Even if it WAS the best thing for the country.


It's all about infrastruture. Who do you think built the highway system? Private businesses?
Wasnt the highway system also built (federally funded) for military purposes in addition to transit/trade infrastructure? I'm sure if large infrastructure is needed then the government will be included - but I would emphasize profit seeking behavior to be the greatest catalyst (acceptable) over taxes that will never get passed (see populist argument), because this isnt like you're taxing the millionaires this time.


No, businesses simply capitalize on the environment that is infront of them. It's the job of the government to set the environment.
I will be completely suprised if that environment is set through in increase in gasoline tax.

[Clove]

http://www.eia.doe.gov/basics/quickoil.htmlWhere do you think the above projection analysis came from? Could it be the Energy Information Administration?

[Daniel]

I'll respond more when I get off work.

[Gan]

Then do you care to explain how someone is able to arrive at the conclusion that OPEC, specifically the Saudis, are producing a surplus? I can't seem to find it.

Could you also explain how expanding production by 1bil pby is going to the slightest impact on current fuel prices?

Could you also explain why any business is going to prefer one paying customer with demands over other customers that just say "load it up"?

I'm reading some pretty dumb ass remarks .... but nothing to refute anything I posted to any degree. Maybe the "lols" are convincing some idiot somewhere, but they're not a very convincing reply ... where's the data?

Clove has it handled. I'm enjoying the show. :popcorn:

[Clove]

You guys are just arguing terminology.

Opec countries have increased their *Capacity* for production, but they are not producing more. I find it doubtful that they actually would.Well that's really the problem, and it's why there's focus on non-Opec member producers. Saudi is producing over their OPEC quota ATM but they aren't showing signs of releasing their surplus into the world supply. This is why we need to make ourselves energy independent. Ludicrously high gas taxes would be a great way to get us there, but I agree with Gan- it's not happening this year.

[Parkbandit]

It won't destroy our economy. It will just force it to change to adapt to the reality of the new world. It will accomplish the same thing that time will, but instead of slow rolling the process it'll just expedite it. The bonus of this is that we don't spend a decade or so dicking around with our foreign policy or falling behind the rest of the world.

Europe did this a long time ago and last time I checked they were doing a lot better then we are.




So..yea.. That's productive. Let's hurt our own economy and pray to god that they don't start looking elsewhere for the same goods.





Tax the fuck out of Gas until people get the hint and start changing their consumption patterns. Funnel the increased revenues into research and building the neccessary infrastructure to use sustainable fuel sources.


So.. putting stipulations on trade with Saudi Arabia would be an economic problem for the US.. but taxing the hell out of gas wouldn't hurt it that much? I just want to make sure I read you right.

Why is it Liberals are always believing that taxing people more will automatically solve every problem there is to solve.

[Tsa`ah]

So.. putting stipulations on trade with Saudi Arabia would be an economic problem for the US.. but taxing the hell out of gas wouldn't hurt it that much? I just want to make sure I read you right.

Why is it Liberals are always believing that taxing people more will automatically solve every problem there is to solve.

In this case it isn't a solution, it's persuasion.

[Parkbandit]

Who does the high gas taxes proposed hurt? It sure won't hurt me.. I'll simply charge my client more money for the work I do.. who will in turn pass it onto their customers.

[Daniel]

So.. putting stipulations on trade with Saudi Arabia would be an economic problem for the US.. but taxing the hell out of gas wouldn't hurt it that much? I just want to make sure I read you right.

Why is it Liberals are always believing that taxing people more will automatically solve every problem there is to solve.

You miss the part about one actually working and one not.

[Parkbandit]

You miss the part about one actually working and one not.


That wasn't your argument.. reread your posts. The reason you said putting stipulations on trade is a bad idea because of it's negative effects on our economy. And your brilliant idea was to tax the shit out of gas to force people to make a change... which would do far more harm to our economy.

Your words, not mine..

[Daniel]

Actually, my first point was that we had no leverage on other countries. I further clarified that point with the notion that anything we tried to do, i.e. stop trade would end up hurting us as well.

[Parkbandit]

I give up.. you can't even admit how fucked up your reasoning is.. when it's posted in the same thread, on the same page.

[Tsa`ah]

Aid has been addressed .... production on either end is pretty much maxed out, which is why supply vs demand is nearly an absolute rule at this point.

Your response was that I was wrong ... and then you post from an article that goes in depth to support what I said.


The oil supply system continues to operate at near capacity and remains vulnerable to both actual and perceived supply disruptions. The supply and demand balance for the remainder of the year is tighter than in last month’s Outlook. World oil markets are particularly tight during the first half of 2008, with year-over-year growth in world oil consumption outstripping growth in non-Organization of the Petroleum Exporting Countries (OPEC) production by over 1 million bbl/d. The combination of rising global demand, fairly normal seasonal inventory patterns, slow gains in non-OPEC supply, and low levels of available surplus production capacity is providing firm support for prices.


You suck at research. Now I know you have problems with numbers above 20 so I'm going to walk you through it.

You would probably be better served by actually reading those things called words that come before and after the numbers. We won't get into the word "estimate" and how often they don't actually land in the realm of actual numbers ... especially in this market.


Estimated Consumption Increase in 2008: 1.2 Million bbl/d

You seemed to follow well enough there.


Estimated Production Increase (non-OPEC): .6 Million bbl/d

There as well.


Estimated Production Increase (OPEC): 1.9 Million bbl/d

Oh damn .... seems your ritalin wore off before you finished the report on estimates. Let me point out the mistake.


OPEC Supply. OPEC crude oil production averaged about 32.2 million bbl/d during the first quarter of 2008. Only Saudi Arabia has significant surplus production capacity, currently estimated to be about 1.9 million bbl/d. OPEC crude oil production is expected to remain relatively flat through the third quarter of 2008, though there is the possibility of either higher or lower output in Iraq and Nigeria, depending on how the security situation in each country evolves. EIA expects that OPEC surplus production capacity will not grow significantly until the end of 2008 and will stay concentrated in Saudi Arabia (OPEC Surplus Oil Production Capacity).

They estimate that Saudi Arabia has a surplus production capacity of 1.9m bpd. Could be more, could be less .... if you bothered to read, they don't expect them to produce it.


Total World Production Deficit : 0.6 Million bbl/d

Fixed that for you.

Of course crude is only half of the equation as someone else pointed out to me. We could have a few trillion barrels of crude sitting in surplus and it would only slightly impact fuel prices.

Our refining capacity is stopped at 85%. It's not very likely any regulations will be lifted to increase that, nor is it very likely we'll see any significant additions to our domestic refining capacity. We're getting next to nothing from the OPEC nations and around 10m bpm from non-OPEC nations.

It really doesn't matter which way you look at it. Everyone is pumping out crude to nearly world refining capacity. Even if that miniscule amount of surplus gets sold or socked away as a reserve .... the impact it will have on the price of crude or the price of a refined fuel is negligible.

The only way we're going to see any drop in price is through conservation methods. Be it speed limits, taxes, or research and engineering. Anything that will deter the general population from continuing it's consumption of the refined products.

[Agamemnon]

lets just do it the old fashioned way and invade.
lets go from being in shit up to our waist, up to our necks...
or are we already at the neck?

We already did invade. Iraq was an OPEC country with the 2nd largest proven oil reserves in the world (second to Saudi Arabia). The Saudi King is smart and is all super friends/lets hold hands with America and caters to America on the big issues, Iraq was an upstart who wanted to hedge against American dominance (by moving their currency to the Euro) and thus got WTFPWNed by the US military... although it's starting to look like the other way around... one of the reasons why we try NOT to invade OPEC nations (because they are usually unstable politically, and we need to nation build which can lead to disastrous results.)

If Saddam was all like US#1 and what not, he would have gotten his Chem weapons, oil money, and oversized mansions and we would have turned a blind eye if he decided to gas a some more people. But, he crossed the line and tried to play chicken with the U.S., he obviously lost.

In the end folks, it's all about the oil/money/power/pussy. Remember what Conan said, and you'll go far in this life.

"Crom was their chief, and he lived on a great mountain, whence he sent forth dooms and death. It was useless to call on Crom, because he was a gloomy, savage god, and he hated weaklings. But he gave a man courage at birth, and the will and might to kill his enemies, which was all any god should be expected to do."

http://www.tarzan.org/art/ffddpm.jpg

Remember kids, Women SAY they dislike violence and aggression but when you beat the shit out of that asshole that just flicked you off at the movie theatre or WTFPWN that stock issue that gained 5 and a quarter points in the last 2 weeks then proceeded to call your competitor and scream "I WTF raped you motherfucker!" Women in secret masturbate to it.

[Clove]

Your response was that I was wrong ... and then you post from an article that goes in depth to support what I said.
Aid has been addressed .... production on either end is pretty much maxed out, which is why supply vs demand is nearly an absolute rule at this point.Did someone drop you on your head? Production, very clearly ISN'T maxed out, why do you think Bush went to Saudi Arabia in the first place, genius? Thanks for the definition of "estimate", now while we're on the subject how about you not discount the estimates you don't like while acknowledging the estimates you do. I am, however, impressed that you've decided to look at current data (finally). Production is declining (slightly) in non-OPEC nations (at the moment) and even though OPEC quotas are keeping production close to even with consumption the production capacity is not maxed out. It is predicted to expand further in the second 1/2 of 2008.

[Gan]

PRIMING THE PUMP
All three candidates promise to lower petrol prices

ACCORDING to a new poll by Public Agenda and Foreign Affairs, six out of ten Americans think reducing energy dependence will help national security “a great deal”. They worry about global warming, too. But most of all they care about putting cheap petrol in their cars. So while all three presidential candidates talk a green streak about climate change, new fuels, cleaner vehicles and cap-and-trade, the immediate political imperative is to get the petrol price down.

The biggest promises so far came from Hillary Clinton in a speech on April 28th. She wants to suspend the federal petrol tax of 18.4 cents a gallon (3.8 litres) for the summer driving season, paying for it with a windfall tax on oil companies. She also wants to ban petrol-price “gouging” and go after “speculators” who, she says, are driving prices up. And she promises to haul OPEC before the WTO, and even before the American courts, for anti-competitive behaviour.



Some of her ideas would make a slight difference, such as pledging to stop adding oil to America's nearly full strategic petroleum reserve. Others will have almost no effect. Hitting oil companies with windfall taxes may generate revenue (to be used, Mrs Clinton says, for green technologies). But taxing oil companies could discourage exploration and investment, curtailing supply and driving oil prices up. As for gouging and speculation, those useful villains, it is unclear whether much of that is going on anyway; and, if it is, what effect it is having on the oil price.

The most obvious thing the government could do is to cut petrol taxes. Mr McCain promised a tax cut for the summer season even before Mrs Clinton thought of it. But this, of course, will encourage driving and send more profits to the oil companies and more fumes into the sky. Barack Obama opposes suspending the tax (though he joins Mrs Clinton in wanting a windfall tax on oil companies), saying it would save drivers only $30 over the summer and would deplete the highway trust fund.

The nettlesome fact at the heart of the matter is that expensive petrol is not the problem. Historically cheap petrol is; it has encouraged what even George Bush has called an American addiction to oil. Until that addiction is cured, expect more unrealistic and inconsistent promises from every stripe of politician.

The Economist, May 1st Print Edition (http://www.economist.com/world/na/displaystory.cfm?story_id=11293932)

_____________________________________________

You might have to have a subscription to view the sourced article (I do).

[Gan]

CRUDE ESTIMATES
The price of oil has soared to a new high, hasn't it?

A CASUAL observer might be forgiven for thinking that the oil price reached a new record, of $115.07 a barrel, on April 16th. And so it did, in nominal terms. But by other measures, oil is not quite as expensive as it seems. That, in turn, may go some way towards explaining why demand for oil continues to rise in many countries, despite prices that would have been unimaginable just a few years ago.

Michael Lewis of Deutsche Bank has come up with several different ways of comparing past and present oil prices. The first step is to account for inflation. But what measure of inflation is most suitable? If historic prices are inflated in line with America's producer-price index, the previous record, struck in the early 1980s, would be the equivalent of $94 in today's money—a level exceeded some months ago. But if the consumer-price index were used instead, oil would need to climb to $118 to hit a record.



But an adjustment for inflation, however it is measured, takes no account of the growth in Western consumers' incomes over the years. Back in 1981, the annual average income within the Group of Seven countries would have been enough to buy only 318 barrels of oil. To set back Western consumers by the equivalent today, Deutsche Bank calculates, the price of oil would have to rise to $134 a barrel.

By the same token, the American government reckons that energy ate up its biggest share of Americans' disposable income in 1980: 8% compared with about 6.6% now. To drive spending on energy to the same level again, says Deutsche, the price of crude would have to rise to $145.

Spending on oil as a share of global output, which is about 3.5%, also peaked in 1980, at 5.9%. Other things being equal, oil will not swallow as big a share of the world's GDP unless the price reaches $150 a barrel.

The disarmingly honest Deutsche analysts also looked at oil prices relative to one final measure: their peers' predictions. They compared the price bankers forecast for oil at the end of each year with the actual outcome over the past decade. Their biggest error was in 2000, when they undershot by 54%. Adding 54% to the consensus forecast at the beginning of the year would produce a price of $115.50. So if the oil price rises by less than 50 cents, oil analysts will prove themselves more misguided than ever before.

The Economist, April 17th Print Edition (http://www.economist.com/finance/displaystory.cfm?story_id=11066673)

[Agamemnon]

We can drastically cut our dependence on oil by going nuclear.

Pass law that all vehicles created by 2015 must be completely electric or at worst a hybrid.

There we have effectively cut off our need for foreign oil. We can now survive on oil from the Americas and elsewhere and not have to worry about mideast blood oil

[Gan]

PUMP ACTION

STUCK in a traffic jam on the road home after an Easter break, the motorist has time to ponder many things. One may be the pain felt filling up the car for the return journey. Petrol prices have risen as the oil price has increased. But the driver's pain at the pump differs across countries, dependent in part on the proportion of the cost that is paid in taxes. Turks have the most reason to feel aggrieved, closely followed by the British. Americans still enjoy relatively cheap fuel—they pay far less in tax than drivers elsewhere.

http://i68.photobucket.com/albums/i3/3strangedays/Petrol.jpg

http://www.economist.com/displaystory.cfm?story_id=10903316

[Clove]

http://www.financialsense.com/editorials/engdahl/2008/0502.html

PERHAPS 60% OF TODAY'S OIL
PRICE IS PURE SPECULATION
by F. William Engdahl
May 2, 2008

The price of crude oil today is not made according to any traditional relation of supply to demand. It’s controlled by an elaborate financial market system as well as by the four major Anglo-American oil companies. As much as 60% of today’s crude oil price is pure speculation driven by large trader banks and hedge funds. It has nothing to do with the convenient myths of Peak Oil. It has to do with control of oil and its price. How?

First, the crucial role of the international oil exchanges in London and New York is crucial to the game. Nymex in New York and the ICE Futures in London today control global benchmark oil prices which in turn set most of the freely traded oil cargo. They do so via oil futures contracts on two grades of crude oil—West Texas Intermediate and North Sea Brent.

A third rather new oil exchange, the Dubai Mercantile Exchange (DME), trading Dubai crude, is more or less a daughter of Nymex, with Nymex President, James Newsome, sitting on the board of DME and most key personnel British or American citizens.

Brent is used in spot and long-term contracts to value as much of crude oil produced in global oil markets each day. The Brent price is published by a private oil industry publication, Platt’s. Major oil producers including Russia and Nigeria use Brent as a benchmark for pricing the crude they produce. Brent is a key crude blend for the European market and, to some extent, for Asia.

WTI has historically been more of a US crude oil basket. Not only is it used as the basis for US-traded oil futures, but it's also a key benchmark for US production.

‘The tail that wags the dog’

All this is well and official. But how today’s oil prices are really determined is done by a process so opaque only a handful of major oil trading banks such as Goldman Sachs or Morgan Stanley have any idea who is buying and who selling oil futures or derivative contracts that set physical oil prices in this strange new world of “paper oil.”

With the development of unregulated international derivatives trading in oil futures over the past decade or more, the way has opened for the present speculative bubble in oil prices.

Since the advent of oil futures trading and the two major London and New York oil futures contracts, control of oil prices has left OPEC and gone to Wall Street. It is a classic case of the “tail that wags the dog.”

A June 2006 US Senate Permanent Subcommittee on Investigations report on “The Role of Market Speculation in rising oil and gas prices,” noted, “…there is substantial evidence supporting the conclusion that the large amount of speculation in the current market has significantly increased prices.”

What the Senate committee staff documented in the report was a gaping loophole in US Government regulation of oil derivatives trading so huge a herd of elephants could walk through it. That seems precisely what they have been doing in ramping oil prices through the roof in recent months.

The Senate report was ignored in the media and in the Congress.

The report pointed out that the Commodity Futures Trading Trading Commission, a financial futures regulator, had been mandated by Congress to ensure that prices on the futures market reflect the laws of supply and demand rather than manipulative practices or excessive speculation. The US Commodity Exchange Act (CEA) states, “Excessive speculation in any commodity under contracts of sale of such commodity for future delivery . . . causing sudden or unreasonable fluctuations or unwarranted changes in the price of such commodity, is an undue and unnecessary burden on interstate commerce in such commodity.”

Further, the CEA directs the CFTC to establish such trading limits “as the Commission finds are necessary to diminish, eliminate, or prevent such burden.” Where is the CFTC now that we need such limits?

they seem to have deliberately walked away from their mandated oversight responsibilities in the world’s most important traded commodity, oil.

Enron has the last laugh…

As that US Senate report noted:

“Until recently, US energy futures were traded exclusively on regulated exchanges within the United States, like the NYMEX, which are subject to extensive oversight by the CFTC,including ongoing monitoring to detect and prevent price manipulation or fraud. In recent years, however, there has been a tremendous growth in the trading of contracts that look and are structured just like futures contracts, but which are traded on unregulated OTC electronic markets. Because of their similarity to futures contracts they are often called “futures look-alikes.”

The only practical difference between futures look-alike contracts and futures contracts is that the look-alikes are traded in unregulated markets whereas futures are traded on regulated exchanges. The trading of energy commodities by large firms on OTC electronic exchanges was exempted from CFTC oversight by a provision inserted at the behest of Enron and other large energy traders into the Commodity Futures Modernization Act of 2000 in the waning hours of the 106th Congress.

The impact on market oversight has been substantial. NYMEX traders, for example, are required to keep records of all trades and report large trades to the CFTC. These Large Trader Reports, together with daily trading data providing price and volume information, are the CFTC’s primary tools to gauge the extent of speculation in the markets and to detect, prevent, and prosecute price manipulation. CFTC Chairman Reuben Jeffrey recently stated:

“The Commission’s Large Trader information system is one of the cornerstones of our surveillance program and enables detection of concentrated and coordinated positions that might be used by one or more traders to attempt manipulation.”

In contrast to trades conducted on the NYMEX, traders on unregulated OTC electronic exchanges are not required to keep records or file Large Trader Reports with the CFTC, and these trades are exempt from routine CFTC oversight. In contrast to trades conducted on regulated futures exchanges, there is no limit on the number of contracts a speculator may hold on an unregulated OTC electronic exchange, no monitoring of trading by the exchange itself, and no reporting of the amount of outstanding contracts (“open interest”) at the end of each day.”

Then, apparently to make sure the way was opened really wide to potential market oil price manipulation, in January 2006, the Bush Administration’s CFTC permitted the Intercontinental Exchange (ICE), the leading operator of electronic energy exchanges, to use its trading terminals in the United States for the trading of US crude oil futures on the ICE futures exchange in London – called “ICE Futures.”

Previously, the ICE Futures exchange in London had traded only in European energy commodities – Brent crude oil and United Kingdom natural gas. As a United Kingdom futures market, the ICE Futures exchange is regulated solely by the UK Financial Services Authority. In 1999, the London exchange obtained the CFTC’s permission to install computer terminals in the United States to permit traders in New York and other US cities to trade European energy commodities through the ICE exchange.

The CFTC opens the door

Then, in January 2006, ICE Futures in London began trading a futures contract for West Texas Intermediate (WTI) crude oil, a type of crude oil that is produced and delivered in the United States. ICE Futures also notified the CFTC that it would be permitting traders in the United States to use ICE terminals in the United States to trade its new WTI contract on the ICE Futures London exchange. ICE Futures as well allowed traders in the United States to trade US gasoline and heating oil futures on the ICE Futures exchange in London.

Despite the use by US traders of trading terminals within the United States to trade US oil, gasoline, and heating oil futures contracts, the CFTC has until today refused to assert any jurisdiction over the trading of these contracts.

Persons within the United States seeking to trade key US energy commodities – US crude oil, gasoline, and heating oil futures – are able to avoid all US market oversight or reporting requirements by routing their trades through the ICE Futures exchange in London instead of the NYMEX in New York.

Is that not elegant? The US Government energy futures regulator, CFTC opened the way to the present unregulated and highly opaque oil futures speculation. It may just be coincidence that the present CEO of NYMEX, James Newsome, who also sits on the Dubai Exchange, is a former chairman of the US CFTC. In Washington doors revolve quite smoothly between private and public posts.

A glance at the price for Brent and WTI futures prices since January 2006 indicates the remarkable correlation between skyrocketing oil prices and the unregulated trade in ICE oil futures in US markets. Keep in mind that ICE Futures in London is owned and controlled by a USA company based in Atlanta Georgia.

In January 2006 when the CFTC allowed the ICE Futures the gaping exception, oil prices were trading in the range of $59-60 a barrel. Today some two years later we see prices tapping $120 and trend upwards. This is not an OPEC problem, it is a US Government regulatory problem of malign neglect.

By not requiring the ICE to file daily reports of large trades of energy commodities, it is not able to detect and deter price manipulation. As the Senate report noted,

“The CFTC's ability to detect and deter energy price manipulation is suffering from critical information gaps, because traders on OTC electronic exchanges and the London ICE Futures are currently exempt from CFTC reporting requirements. Large trader reporting is also essential to analyzE the effect of speculation on energy prices.”

The report added,

“ICE's filings with the Securities and Exchange Commission and other evidence indicate that its over-the-counter electronic exchange performs a price discovery function -- and thereby affects US energy prices -- in the cash market for the energy commodities traded on that exchange.”

Hedge Funds and Banks driving oil prices

In the most recent sustained run-up in energy prices, large financial institutions, hedge funds, pension funds, and other investors have been pouring billions of dollars into the energy commodities markets to try to take advantage of price changes or hedge against them. Most of this additional investment has not come from producers or consumers of these commodities, but from speculators seeking to take advantage of these price changes. The CFTC defines a speculator as a person who “does not produce or use the commodity, but risks his or her own capital trading futures in that commodity in hopes of making a profit on price changes.”

The large purchases of crude oil futures contracts by speculators have, in effect, created an additional demand for oil, driving up the price of oil for future delivery in the same manner that additional demand for contracts for the delivery of a physical barrel today drives up the price for oil on the spot market. As far as the market is concerned, the demand for a barrel of oil that results from the purchase of a futures contract by a speculator is just as real as the demand for a barrel that results from the purchase of a futures contract by a refiner or other user of petroleum.

Perhaps 60% of oil prices today pure speculation

Goldman Sachs and Morgan Stanley today are the two leading energy trading firms in the United States. Citigroup and JP Morgan Chase are major players and fund numerous hedge funds as well who speculate.

In June 2006, oil traded in futures markets at some $60 a barrel and the Senate investigation estimated that some $25 of that was due to pure financial speculation. One analyst estimated in August 2005 that US oil inventory levels suggested WTI crude prices should be around $25 a barrel, and not $60.

That would mean today that at least $50 to $60 or more of today’s $115 a barrel price is due to pure hedge fund and financial institution speculation. However, given the unchanged equilibrium in global oil supply and demand over recent months amid the explosive rise in oil futures prices traded on Nymex and ICE exchanges in New York and London it is more likely that as much as 60% of the today oil price is pure speculation. No one knows officially except the tiny handful of energy trading banks in New York and London and they certainly aren’t talking.

By purchasing large numbers of futures contracts, and thereby pushing up futures prices to even higher levels than current prices, speculators have provided a financial incentive for oil companies to buy even more oil and place it in storage. A refiner will purchase extra oil today, even if it costs $115 per barrel, if the futures price is even higher.

As a result, over the past two years crude oil inventories have been steadily growing, resulting in US crude oil inventories that are now higher than at any time in the previous eight years. The large influx of speculative investment into oil futures has led to a situation where we have both high supplies of crude oil and high crude oil prices.

Compelling evidence also suggests that the oft-cited geopolitical, economic, and natural factors do not explain the recent rise in energy prices can be seen in the actual data on crude oil supply and demand. Although demand has significantly increased over the past few years, so have supplies.

Over the past couple of years global crude oil production has increased along with the increases in demand; in fact, during this period global supplies have exceeded demand, according to the US Department of Energy. The US Department of Energy’s Energy Information Administration (EIA) recently forecast that in the next few years global surplus production capacity will continue to grow to between 3 and 5 million barrels per day by 2010, thereby “substantially thickening the surplus capacity cushion.”

Dollar and oil link

A common speculation strategy amid a declining USA economy and a falling US dollar is for speculators and ordinary investment funds desperate for more profitable investments amid the US securitization disaster, to take futures positions selling the dollar “short” and oil “long.”

For huge US or EU pension funds or banks desperate to get profits following the collapse in earnings since August 2007 and the US real estate crisis, oil is one of the best ways to get huge speculative gains. The backdrop that supports the current oil price bubble is continued unrest in the Middle East, in Sudan, in Venezuela and Pakistan and firm oil demand in China and most of the world outside the US. Speculators trade on rumor, not fact.

In turn, once major oil companies and refiners in North America and EU countries begin to hoard oil, supplies appear even tighter lending background support to present prices.

Because the over-the-counter (OTC) and London ICE Futures energy markets are unregulated, there are no precise or reliable figures as to the total dollar value of recent spending on investments in energy commodities, but the estimates are consistently in the range of tens of billions of dollars.

The increased speculative interest in commodities is also seen in the increasing popularity
of commodity index funds, which are funds whose price is tied to the price of a basket of various commodity futures. Goldman Sachs estimates that pension funds and mutual funds have invested a total of approximately $85 billion in commodity index funds, and that investments in its own index, the Goldman Sachs Commodity Index (GSCI), has tripled over the past few years. Notable is the fact that the US Treasury Secretary, Henry Paulson, is former Chairman of Goldman Sachs.
--
Once again oil prices are being driven by futures speculation not supply and demand. Production is not "maxed out" not in any stretch of the imagination that would cause the current spike in price.

F. William Engdahl (http://en.wikipedia.org/wiki/F._William_Engdahl) may not have an education in economics from the school of life, but I trust his expert opinion.

[Agamemnon]

It would be interesting if some really pissed off consumers drove over to every oil traders home and stick in their mailbox, "Ok, if you don't sell 100 blocks of oil shares tomorrow we'll blow up your house."

Hrmm.... the lives of 300 versus the well being of billions of people... should be a psych question.

[Gan]

Good article Clove. Thanks for posting.

[longshot]

Good article Clove. Thanks for posting.

I like the economist articles, but you don't find the F. William Engdahl article at all conspiratorial?

"Anglo American Oil companies"?

The author alludes to some secretive band of brothers that control the world composed of hedge funds and investment banks. I'm really not seeing evidence put forth,... only criticism of the oversight mechanisms in place. It seems the author has a healthy bias against dollarization and globalization.

There are derivative contracts on all commodities, currencies, and indexes... exchange traded futures, as well as OTC futures/forwards. There are options on futures, and other volatility instruments. The notional value of these contracts are in the trillions of dollars... but how can any single group control the market price? To conclude the price is "controlled" by these few super elites is not something I buy into.

Amaranth (hedge fund) had $9 billion in capital to manage. I can't find a figure for how much their notional natural gas contracts were worth, but even leveraged, they couldn't control the market. They lost $6 billion in a single week on natural gas. I don't see how long-oil short-dollar is a guaranteed return.

Clove, you're absolutely entitled to your opinion. But I'm hesitant to accept what's stated. While it criticizes oversight, it overlooks certain market mechanism... and contains a healthy dose of conspiracy.

He might be right, but I respectfully disagree.

[Clove]

When supply and demand is essentially stable it's hard to justify such a huge spike in price any other way. There's a bit of a "Hotelling Principle" going on here as well. While demand has increased it's also being met. The Saudis have already made public statement that they will meet orders as they come in and you're not reading about any shortages anywhere. Oil is available, any short supply is temporary so why did it go up like 50% in 30 days? That's quite a bit of fundamental pressure.

And for the record I don't really think it's a conspiracy just the nature of the oil commodity, which is being accentuated by a normal commodities shift after a typical boom cycle. Bill Engdahl isn't the only economist who is suggesting this. Then again Longshot, you're in good company if you disagree because some very good economists don't agree. However the AIE has recognized the speculation pressure as well as many others. I suppose time will tell.

As for long oil short dollar... it sure is a great bet at the moment.

[Gan]

I like the economist articles, but you don't find the F. William Engdahl article at all conspiratorial?

"Anglo American Oil companies"?

The author alludes to some secretive band of brothers that control the world composed of hedge funds and investment banks. I'm really not seeing evidence put forth,... only criticism of the oversight mechanisms in place. It seems the author has a healthy bias against dollarization and globalization.

There are derivative contracts on all commodities, currencies, and indexes... exchange traded futures, as well as OTC futures/forwards. There are options on futures, and other volatility instruments. The notional value of these contracts are in the trillions of dollars... but how can any single group control the market price? To conclude the price is "controlled" by these few super elites is not something I buy into.

Amaranth (hedge fund) had $9 billion in capital to manage. I can't find a figure for how much their notional natural gas contracts were worth, but even leveraged, they couldn't control the market. They lost $6 billion in a single week on natural gas. I don't see how long-oil short-dollar is a guaranteed return.

Clove, you're absolutely entitled to your opinion. But I'm hesitant to accept what's stated. While it criticizes oversight, it overlooks certain market mechanism... and contains a healthy dose of conspiracy.

He might be right, but I respectfully disagree.

So does that mean you dont attribute some or most of the price inflation of oil due to speculation?

Between the conflict in Iraq and the region's instability and then the devaluation of the dollar and the consequential speculization of oil futures, I dont know what else to attribute it to.

Because I can not find any defineable market shortages, even faced with increased demand from developing states like India and China, that would point to the shift upwards.

[Keller]

I think the price of the home interest mortgage deduction is built into the price of oil.

I'm just sayin'.

[Gan]

THATS IT! We should eliminate the MID and gas prices will fall.

Someone call an emergency FOMC meeting and bring this to a motion.

*I'll call Greenspan so he can start lobbying for a vote. Someone call Bernanke and set him straight.

[longshot]

So does that mean you dont attribute some or most of the price inflation of oil due to speculation?

Between the conflict in Iraq and the region's instability and then the devaluation of the dollar and the consequential speculization of oil futures, I dont know what else to attribute it to.

Because I can not find any defineable market shortages, even faced with increased demand from developing states like India and China, that would point to the shift upwards.

The only reason I posted was that I was legitimately surprised you thought that article was good.

I explained to Clove why I wasn't a fan of it, and well, I thought it was a pretty poor piece of writing. It was close to saying that the heads of all the investment banks meet up with the pope, the queen of England, some Jews, and a few Freemasons to set oil prices.

As far as oil prices, I don't have all the answers, and I don't think anyone does. I don't think anyone can identify a specific breakdown of what is driving oil, nor do I think that anyone can attribute a certain percentage of price to pressures from speculation.

Regarding pricing, a weakening dollar is a legitimate cause for an increase in price. Concerns over supply due to political instability are significant. If demand starts to narrow the capacity band, I think that's significant. These issues with the future are important today because of the intertemporal decision making process. I think this is why oil is so expensive now.

If it's going to be worth a lot more in the future, I'm going to need more to sell it today. I personally wouldn't call this speculation... I'd chalk it up to uncertainty, as well as an concerns over future demand/supply. You might disagree with that.

I think you can even look at it from the perspectives of real options, and point to volatility prices for supply considerations going forward. I think I mentioned it in another thread, but this adds incentive to demand a higher price today when making the decision to sell or not.

I'm not the end-all be-all expert on this. I'm not claiming to be. It's my opinion that some type of super spike is not the cause of pure speculation. But, then again, I can't say definitively say that it's not.

My point was that basing opinion on that article is, well, shaky at best. And that's why I made my post in the first place... I was surprised that you thought it was "good."

I'm putting this link in so some other people that might be interested in this can understand some of what's being talked about. It's basic, and I think it does a pretty good job of explaining some of things we've spoken about. I don't agree with everything he says (Austrian!), but he does give an intro into the futures market for oil. It's in no way academic...

http://www.econlib.org/library/Columns/y2008/Murphyoil.html

Anyways, nobody at a hedge fund or an i-bank needs to swear on a skull covered in goats blood when they buy an otc oil forward. Or at least they hid the altar from me during my internship...

[Clove]

Good article as well. I wasn't going to bother explaining the Hotelling Rule (without charging by the hour :D)

[Clove]

I think the price of the home interest mortgage deduction is built into the price of oil.

I'm just sayin'.Bastard. Now we have to revamp our tax policy.

[Clove]

http://www.reuters.com/article/idUSL1969141120080519

Oil price defies swelling supplies
Mon May 19, 2008 1:35pm EDT

LONDON (Reuters) - At least half a million extra barrels of oil are expected to flow to world markets each day in June -- news that so far has done little to bring down prices from record-high levels.

Oil at close to $130 a barrel is worrying not just for consumers, but also for major oil firms and producer countries fearful of demand destruction and a potential price collapse.

"The price is scary," a senior western oil executive said. "The market may be poised for a big drop, especially if the speculators exit in a hurry."

So far, the highest profile predictions have been for further price rises.

Goldman Sachs, the most active investment bank in energy markets, on Friday raised its forecast for oil prices in the second half of this year to an average of $141 a barrel.

Its research helped to push U.S. crude to its latest record of $127.82, while traders ignored news the world's biggest oil exporter Saudi Arabia had been pumping an extra 300,000 barrels per day (bpd) since May 10 and would maintain production levels in June.

The market also dismissed higher export goals for Iraq, which aims to raise shipments by at least 125,000 bpd in June.

"What would it take to move prices down?" asked David Dugdale of MFC Global Investment Management. "The marginal cost of oil is about $80, but we're a long way from that."

The marginal cost is the amount required to bring on hard-to-access oil only considered viable when other supplies fail to meet demand. It can be viewed as a level below which prices are unlikely to fall.

Washington last week looked to an even lower floor when it approved legislation to stop the refilling of the U.S. emergency stockpile until crude prices fell below $75 a barrel. The effect is to add around 75,000 bpd to the oil market.

On top of that and the extra Saudi and Iraqi crude, ship-loads of Iranian oil have been floating at sea for weeks awaiting buyers.

PLENTY OF CRUDE

Members of the Organization of the Petroleum Exporting Countries (OPEC) have repeatedly said supplies are plentiful.

"There is more oil in the market than consumers want," Iraqi Oil Minister Hussain al-Shahristani told Reuters on Monday.

"What is driving up prices is an increase in speculative funds. An increase in production by OPEC countries would not really change the scenario -- it would not affect the price."

It is received wisdom that commodity markets always revert to fundamentals of supply and demand because they are underpinned by raw materials. If buyers do not emerge when prices are high, a surplus will build and deflate prices.

Oil companies and producer nations bear the scars of the last slump from a peak of just below $27 in December 1996 to a low below $11 a barrel in December 1998 after the industry invested in new production only to see demand collapse.

"The fundamentals rule, but the question is whether the futures market should reflect the fundamentals of the next few months or of the next few years," said Olivier Jakob of Petromatrix.

As the U.S. currency has weakened, making dollar-denominated commodities relatively cheap, and other markets appear unlikely to deliver high returns, financial players have increased their positions in commodities.

Investors such as pension funds tend to lock in for the long term and are not expected to leave the market quickly, but short-term speculators could sell more rapidly.

For now, they could be held in the market by expectations any supply increase is temporary as refinery maintenance pushes extra oil on to the market.

POOR QUALITY CRUDE

Much of the surplus is also poor quality.

Most of the Iranian crude, which has been building up on vessels for around two months, according to shipping brokers, is very heavy and hard to refine.

When Iranian crude stocks last built up two years ago, the market impact was minimal.

The Iraqi and Saudi crudes, however, are relatively easy to refine and more bearish analysts point to the emergence of a market structure that if sustained could imply falling prices.

European benchmark Brent crude this month switched to contango, meaning prompt crude is cheaper than oil for later delivery, encouraging traders to build stocks further.

U.S. crude is still in backwardation, meaning the promptest oil is the most expensive, but the backwardation has narrowed.

"More supply is being made available to the market," Jakob said. "The physical reality is showing more in the timespreads (contango) than in the outright price ... which remains in a world of its own."

[Clove]

http://www.businessweek.com/bwdaily/dnflash/content/may2008/db20080520_524455.htm?chan=top+news_top+news+index _top+story

Are Pension Funds Fueling High Oil?

A Senate hearing weighs charges that speculation by big investors and sovereign wealth funds is behind the rise in commodities and energy prices
by Moira Herbst

If you're wondering why driving to work has gotten so expensive, you might want to peruse your pension fund's investments. That's because speculation by institutional investors pouring money into the commodities market may be largely to blame for spiking oil prices, according to testimony on May 20 before the Senate Committee on Homeland Security & Governmental Affairs. Crude oil, a so-called hard asset, is viewed as a buffer against inflation—a foe of longer-term investment returns. At the hearing, "Financial Speculation in Commodity Markets: Are Institutional Investors and Hedge Funds Contributing to Food and Energy Price Inflation?," senators heard from those defending the role of speculators in oil and commodities markets as well as those who argue that excessive speculation is the root of global price surges.

"[Commodities] are experiencing demand shock from a new category of speculators: institutional investors like corporate and government pension funds, university endowments, and sovereign wealth funds," said Michael Masters, managing member of Masters Capital Management, a Virgin Islands-based hedge fund. "Index speculators are the primary cause of the recent price spikes in commodities."

On May 20, crude oil prices settled at a record $129.07 on the New York Mercantile Exchange (NMX) after touching a new high of $129.60. The national average for a gallon of gasoline hit a record of $3.80 per gallon the same day.
Light CFTC Hand

The explosion in the number of financial players in the energy markets has occurred particularly in the past two years—also a period of soaring energy prices. That's why speculators are now under fire from Congress and the public as potential culprits (BusinessWeek.com, 5/15/08).

But in the hearing, Masters distinguished between traditional speculators and what he calls index speculators, or passive investors who enter the commodities markets as a long-term hedge against inflation. Commodities exchanges limit the number of positions an investor can take in the market, but Masters says the Commodity Futures Trading Commission has allowed unlimited speculation in these markets through a loophole. This so-called swaps loophole exempts investment banks like Goldman Sachs (GS) and Merrill Lynch (MER) from reporting requirements and limits on trading positions that are required of other investors. The loophole allows pension funds to enter into a swap agreement with an investment bank, which can then trade unlimited numbers of the contracts in futures markets.

Some experts fault the CFTC, charged with regulating commodities markets, for allowing such loopholes. "Congress has provided the CFTC the power to control this unlimited [speculation]; the law is very specific about establishing position limits," says Steve Briese, author of The Commitments of Traders Bible and CommitmentsOfTraders.org, a site that focuses on U.S. futures markets. "The problem is they have abdicated this role." The dramatic surge in energy prices has helped to spark inflation across the economy and, as others at the hearing testified, has cut into profits of most in the supply chain. Briese points to Treasury reports that the top five users of swap agreements are investment banks, four of which dominate swap dealing in commodities and commodities futures: Bank of America (BAC), Citigroup (C), JPMorgan Chase (JPM), HSBC North America Holdings (HBC), and Wachovia (WB).

Speculative activity in commodity markets has grown dramatically over the last several years. In the past decade, the share of long interests—positions that benefit when prices rise—held by financial speculators has grown from one-quarter to two-thirds of the commodity market. In only five years, from 2003 to 2008, investment in index funds tied to commodities has grown twentyfold, from $13 billion to $260 billion.

Some analysts say that as commodities markets have been deluged with investment bank money, supply and demand has been rendered less relevant, to the detriment of consumers and producers and marketers. In a May 9 research note, Lehman Brothers (LEH) economists argued that oil's recent rise has been fueled by "non-supply-demand factors and by potential inventory misperceptions." In other words, the dollar weakening and "investors' desire to be exposed to real assets" has spurred increased inflows from investors biased toward long positions. Additionally, hedge fund director Masters points to data showing that over a five-year period, China's demand for oil has increased by 920 million barrels, while over the same period, index speculators' demand has increased by 848 million barrels.
Time to 'Muscle Up'?

Pressure on Congress is increasing not only from consumers but also from industry groups. The New England Fuel Institute (NEFI) and the Petroleum Marketers Association of America (PMAA), whose members are marketers and retailers of petroleum products, have called on Congress for more oversight of speculation in energy markets. A trucker-consumer coalition called Truckers & Citizens United has also called for greater market transparency amid "crippling" energy prices.

At the Tuesday hearing, Senator Claire McCaskill (D-Mo.) grilled CFTC chief economist Jeffrey Harris on why his agency is not more concerned with the impact of speculation on commodity prices. "The people of America are about to pick up pitchforks," she said. "If you were Popeye, I'd give you a can of spinach. It's time to muscle up here." Harris said the agency monitors markets daily, and has "an active engagement in the Agriculture and Energy Depts. The CFTC does not need further legislation to perform its duty of overseeing commodities markets, and that government intervention could distort the market, he added. "Markets are most healthy when there is no limit on who can participate in them," Harris said. "When investors are limited, they will transfer funds to other [less regulated] markets and diminish the effectiveness of hedging."

For their part, pension fund managers say they're not to blame for commodity price surges. The California Public Employees Retirement System (CalPERS), the largest U.S. pension fund, has invested about $1.1 billion in commodities swaps contracts through investment banks like Goldman Sachs. CalPERS spokesman Clark McKinley says the fund started considering commodities investing in 2006 as an inflation hedge and because many economists predict rising energy costs for several decades. However, that represents a fraction of the fund's $242 billion in assets, he says, and ultimately has only a minimal effect on commodity prices. "We understand that there is of course some effect of investors on [commodity] prices. But it's a relatively small impact," McKinley said in a telephone interview.

Senator Joe Lieberman (I-Conn.), the committee chairman, concluded the hearing by agreeing that institutional investors are having a disproportionate impact on commodity prices. He says he will convene another panel of witnesses to examine how to close the "swaps loophole," among other ideas for reform, some of which are included in the Consumer First Energy Act of 2008 proposed on May 7 by a group of Senate Democrats. "At times it is in the public interest to limit the opportunity people have to maximize profits," Lieberman said. "A lot of the rest of us are paying through the nose as a result, including a lot of us who can't afford to pay through the nose."

[Warriorbird]

Yay Congress!

Oy.

[Clove]

Oil Falls to 4-Year Low on OPEC Skepticism, U.S. Supply Gain

By Mark Shenk

Dec. 17 (Bloomberg) -- Oil fell to the lowest level in more than four years as OPEC failed to convince traders that the glut in crude will diminish and the U.S. government said supplies climbed for the 11th time in 12 weeks.

The Organization of Petroleum Exporting Countries agreed to cut output by 9 percent from current levels. Inventories rose 525,000 barrels to 321.3 million barrels last week, the U.S. Energy Department said today in a weekly report.

“It’s less than meets the eye,” said Lawrence Eagles, global head of commodities research at JPMorgan Chase & Co. in New York. “This may stem the bloating in stocks but isn’t enough to get rid of the surplus.”

Crude oil for January delivery declined $1.54, or 3.5 percent, to $42.06 a barrel at 1:45 p.m. on the New York Mercantile Exchange. Futures touched $40.20, the lowest since July 14, 2004. Prices have tumbled 72 percent from a record $147.27 on July 11.

OPEC’s 11 members with quotas will trim current production by 2.46 million barrels a day to 24.845 million barrels a day, the group’s president, Chakib Khelil, said in Oran, Algeria. OPEC has held four meetings in as many months.

“They are facing the distinct possibility of oil falling to $30 a barrel and even lower,” said Addison Armstrong, director of market research for Tradition Energy in Stamford, Connecticut. “They have to bring supply down further because they aren’t getting any help on the demand front until the second half of next year at the earliest.”

Larger Cut

The cut is larger than a 2 million-barrel reduction indicated yesterday by Saudi Arabian Oil Minister Ali al-Naimi.

OPEC’s rate of compliance with a previous output cut is more than 85 percent, al-Naimi told reporters today before the ministerial meeting that decided production targets.

“I think the market gave every signal that there had to be an additional cut of at least 2.5 million barrels if OPEC expected to bolster prices,” Armstrong said. “There is such a lack of trust when it comes to compliance that it was impossible to agree to what was needed. This lack of trust gives members every incentive to cheat on quotas.”

Russia cut oil exports by 350,000 barrels a day last month and may reduce supply a further 320,000 barrels a day next year, in collaboration with OPEC, if prices remain weak, Russian Deputy Prime Minister Igor Sechin told OPEC ministers during opening speeches at today’s meeting.

Quota Compliance

“I think the jury should still be out,” said Sarah Emerson, managing director of Energy Security Analysis Inc., a consulting firm in Wakefield, Massachusetts. “We will have to see their compliance. If they come close to their objective, we believe they will forestall a further decline in prices.”

Brent crude oil for February settlement rose 44 cents, or 0.9 percent, to $47.09 a barrel on London’s ICE Futures Europe exchange.

U.S. inventories may have gained because the oil market is in contango, where crude for future delivery is more expensive than near-month prices, encouraging stockpile increases. U.S. supplies have climbed 11 percent since Sept. 19.

“There is nothing bullish in these numbers,” said Nauman Barakat, senior vice president of global energy futures at Macquarie Futures USA Inc. in New York. “The OPEC announcement looks big on first glance but really isn’t. They are playing with smoke and mirrors.”

Supplies at Cushing, Oklahoma, where oil that’s traded in New York is stored, climbed 21 percent to 27.5 million barrels, the highest since May 2007.

“The big build at Cushing shows that in a contango market everyone who can is taking delivery, which makes it much more difficult for OPEC to hold it together,” Barakat said.

To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net.

Last Updated: December 17, 2008 13:56 EST

Where the fuck did all this supply come from!!!!

[Tsa`ah]

Reduced consumption vs non-reduction in production.

[Clove]

Reduced consumption vs non-reduction in production.Crude oil for January delivery fell 1 cent to US$43.59 a barrel at 10:10 a.m. on the New York Mercantile Exchange. Prices have tumbled 70% from a record US$147.27 on July 11.

[Tsa`ah]

Crude oil for January delivery fell 1 cent to US$43.59 a barrel at 10:10 a.m. on the New York Mercantile Exchange. Prices have tumbled 70% from a record US$147.27 on July 11.

And that has exactly what to do with the minor addition to surplus ... let alone the current supply?

[Tsa`ah]

Since you're incapable of responding to me outside of a negative rep comments ....


OPEC - The reason for... 12-17-2008 01:44 PM Wow.

Read up on it on your own ... after all you are just that good at posting articles, may as well brush up on understanding them.

http://www.eia.doe.gov/steo

[Clove]

Since you're incapable of responding to me outside of a negative rep comments ....



Read up on it on your own ... after all you are just that good at posting articles, may as well brush up on understanding them.

http://www.eia.doe.gov/steoWhy should you pay attention to EIA statistics now. You wouldn't before. OPEC has cut supply three times in three months. The demand was steady with production over the summer and it didn't account for the price spike any more than it accounts for such a dramatic drop. Futures are only down 1%.

Demand fell all through the summer and prices continued to rise, OPEC lowers its quota three times in a row and it barely has an effect. This doesn't resemble a classic bubble effect or anything.

[Tsa`ah]

Why should you pay attention to EIA statistics now. You wouldn't before. OPEC has cut supply three times in three months. The demand was steady with production over the summer and it didn't account for the price spike any more than it accounts for such a dramatic drop. Futures are only down 1%.

I believe I've pointed out the statistics ... you just can't wrap your head around them.


Demand fell all through the summer and prices continued to rise, OPEC lowers its quota three times in a row and it barely has an effect. This doesn't resemble a classic bubble effect or anything.

Considering this year we're looking at reduction of 250,000 - 300,000 bpd, 5 million bpd idle production ... next year possibly more as prices begin to climb in response to both lowered production and the first increase in demand in over 33 months. It should be interesting to watch everything from overhang manipulation, surplus growth, spare capacity growth, and the 2.50 - 3.00 bitch slap we'll get due to a short spike in consumption.

[Daniel]

Why should you pay attention to EIA statistics now. You wouldn't before.

That's funny. The same thing could be said about you and the NBER.

[Clove]

That's funny. The same thing could be said about you and the NBER.Ah ever the troller.

[Clove]

I believe I've pointed out the statistics ... you just can't wrap your head around them.



Considering this year we're looking at reduction of 250,000 - 300,000 bpd, 5 million bpd idle production ... next year possibly more as prices begin to climb in response to both lowered production and the first increase in demand in over 33 months. It should be interesting to watch everything from overhang manipulation, surplus growth, spare capacity growth, and the 2.50 - 3.00 bitch slap we'll get due to a short spike in consumption.Sorry if you can't recognize a bubble when you see one, maybe that's covered in the next semester in the school of life.

[Tsa`ah]

Life teaches me to remove myself, as much as possible, from the effects of such things.

I do find it funny that you turn it into a flame fest whenever you're at a loss, or at the very least, unable to defend or keep up your blathering.

I'll keep a cart of linens warm for you.

[Daniel]

Ah ever the troller.

Because you're so above trolling other people

[Parkbandit]

I do find it funny that you turn it into a flame fest whenever you're at a loss, or at the very least, unable to defend or keep up your blathering.


Actually.. you initiated the "flame fest" with:


Since you're incapable of responding to me outside of a negative rep comments ....




Read up on it on your own ... after all you are just that good at posting articles, may as well brush up on understanding them.



I believe I've pointed out the statistics ... you just can't wrap your head around them.


Prior to that, Clove simply posted an article and answered a question without any meanie poo wordies to you.

[Tsa`ah]

Actually.. you initiated the "flame fest" with:

An initiation of conflict is an initiation of conflict ... be it via rep or the public venue.


Prior to that, Clove simply posted an article and answered a question without any meanie poo wordies to you.

Read the above.

[Clove]

An initiation of conflict is an initiation of conflict ... be it via rep or the public venue.



Read the above.I initiated conflict by posting an article and asking what happened to all the fundementals? Tsa'ah, I hate to break it to you but all those economists who didn't go the to school of life, have pretty much concluded that oil was in a speculation driven bubble. The shift in real demand did not factor adequately into the price.

[CrystalTears]

An initiation of conflict is an initiation of conflict ... be it via rep or the public venue.
You don't even know who gave you the rep in the first place. You're assuming.

[Clove]

You don't even know who gave you the rep in the first place. You're assuming.What rep?

[Tsa`ah]

I initiated conflict by posting an article and asking what happened to all the fundementals? Tsa'ah, I hate to break it to you but all those economists who didn't go the to school of life, have pretty much concluded that oil was in a speculation driven bubble. The shift in real demand did not factor adequately into the price.

Are you really this incapable of following along? I'll take the liberty of recapping for you.


Where the fuck did all this supply come from!!!!


Reduced consumption vs non-reduction in production.


Crude oil for January delivery fell 1 cent to US$43.59 a barrel at 10:10 a.m. on the New York Mercantile Exchange. Prices have tumbled 70% from a record US$147.27 on July 11.


And that has exactly what to do with the minor addition to surplus ... let alone the current supply?


OPEC - The reason for... 12-17-2008 01:44 PM Wow.


Since you're incapable of responding to me outside of a negative rep comments ....

Read up on it on your own ... after all you are just that good at posting articles, may as well brush up on understanding them.

http://www.eia.doe.gov/steo


Why should you pay attention to EIA statistics now. You wouldn't before. OPEC has cut supply three times in three months. The demand was steady with production over the summer and it didn't account for the price spike any more than it accounts for such a dramatic drop. Futures are only down 1%.

Demand fell all through the summer and prices continued to rise, OPEC lowers its quota three times in a row and it barely has an effect. This doesn't resemble a classic bubble effect or anything.


I believe I've pointed out the statistics ... you just can't wrap your head around them.

Considering this year we're looking at reduction of 250,000 - 300,000 bpd, 5 million bpd idle production ... next year possibly more as prices begin to climb in response to both lowered production and the first increase in demand in over 33 months. It should be interesting to watch everything from overhang manipulation, surplus growth, spare capacity growth, and the 2.50 - 3.00 bitch slap we'll get due to a short spike in consumption.


Sorry if you can't recognize a bubble when you see one, maybe that's covered in the next semester in the school of life.


Life teaches me to remove myself, as much as possible, from the effects of such things.

I do find it funny that you turn it into a flame fest whenever you're at a loss, or at the very least, unable to defend or keep up your blathering.

I'll keep a cart of linens warm for you.


I initiated conflict by posting an article and asking what happened to all the fundementals? Tsa'ah, I hate to break it to you but all those economists who didn't go the to school of life, have pretty much concluded that oil was in a speculation driven bubble. The shift in real demand did not factor adequately into the price.

[Tsa`ah]

You don't even know who gave you the rep in the first place. You're assuming.

It's not a stretch considering the time and who was on. Get Kranar to confirm that it wasn't him and I'll concede the point.

[CrystalTears]

It was your rep. If you're so insistent that it's him, you get the proof. There was about a dozen people on around that time.

I'm just saying that it may not have been him. He's not the only one who reads this thread.

[Tsa`ah]

You want to suggest it wasn't him and that it's a stretch to make the assumption. Get Kranar to state it wasn't him with the initial rep to the post and I'll drop it.

He only "asked" about the rep a day after I quoted his remark, and he was the most likely suspect considering who was on at the time.

So again, if you want to take that defense ... get Kranar to say it's so and I'll button it over that subject.

[CrystalTears]

I didn't say it was or wasn't him, nor that it was a stretch. I'm just saying it's strange to want to present an argument based on something you're not sure about. That's all.

If you want to present that as fact, YOU get the proof.

[Clove]

He ought to be used to bad rep by now. I mean, if nobody else was logged in BUT me, well maybe.

But hey, at least he can recap. We all know demand has plummeted, just like we all know that the oil spike was the result of a speculative bubble. I posted piles of evidence and Tsa'ah ignored it then, just as he'll continue to ignore it.

At this point it doesn't matter, since it's generally assumed now. But Tsa'ah knows better. He's been to the school of life.

[Tsa`ah]

Lack of denial until mentioned by third parties not involved ... after quoted and subsequently responded to is really all the proof I need.

[Keller]

I don't think you get to say, "You did X."

And then when someone denies that respond, "Proof you didn't do X!"

That's backwards. If you want to make an unsubstantiated claim, then prove it.

[CrystalTears]

Actually the rep was from me. You're welcome.

[Clove]

I don't think you get to say, "You did X."

And then when someone denies that respond, "Proof you didn't do X!"

That's backwards. If you want to make an unsubstantiated claim, then prove it.Hush Keller, he's been to the school of life.

[Keller]

Actually the rep was from me. You're welcome.

Get Kranar to confirm or you're lying!

[Clove]

Actually the rep was from me. You're welcome.


Get Kranar to confirm or you're lying!Pwn'd!

[Keller]

Hush Keller, he's been to the school of life.

Fuck you for quoting my poor spelling before I could amend it.

FUCK YOU

[Clove]

Fuck you for quoting my poor spelling before I could amend it.

FUCK YOUYou are initiating hostilities.

[Keller]

You are initiating hostilities.

I put too much siracha on my yakisoba. Heart burn makes me testy.

[CrystalTears]

Mmm yakisoba...

[Tsa`ah]

He ought to be used to bad rep by now. I mean, if nobody else was logged in BUT me, well maybe.

But hey, at least he can recap. We all know demand has plummeted, just like we all know that the oil spike was the result of a speculative bubble. I posted piles of evidence and Tsa'ah ignored it then, just as he'll continue to ignore it.

At this point it doesn't matter, since it's generally assumed now. But Tsa'ah knows better. He's been to the school of life.

I've been out of HS for 16 years now ... I haven't given a rat's ass about any sort of reputation, outside of personal and professional acquaintances, for at least 19. Yet somehow you're under the delusion that you rate.

What this boils down to is that I could say liquid water is wet .... you'd argue and start with the flames ... waiting for the squad to come in and defend you when I react.

In any case ... you're still qualified to fold linens for me

[CrystalTears]

Except that you're the one who felt it was no holds barred because you got a neg. rep.

[Keller]

waiting for the squad to come in and defend you when I react.


I'm just trolling here.

Don't mind me.

[Tsa`ah]

Except that you're the one who felt it was no holds barred because you got a neg. rep.

I didn't give a shit about the rep ... I responded to his comment.

[CrystalTears]

Which comment? Clove stating it wasn't about supply but speculation.. or the "Wow."?

[Keller]

I didn't give a shit about the rep ... I responded to his comment.

Good call.

CT, you're now a "his" until you prove otherwise.

[CrystalTears]

Good call.

CT, you're now a "his" until you prove otherwise.
You just want me to post more boob pics. I see what you did there.

[Tsa`ah]

Which comment? Clove stating it wasn't about supply but speculation.. or the "Wow."?

http://forum.gsplayers.com/showpost.php?p=856600&postcount=83

[Clove]

I put too much siracha on my yakisoba. Heart burn makes me testy.Mmmm yakisoba.

[Clove]

http://forum.gsplayers.com/showpost.php?p=856600&postcount=83Wow.

[Keller]

You just want me to post more boob pics. I see what you did there.

Warclaidhm proved you don't have to be a woman to have boobs.

I'm looking for true confirmation.

[CrystalTears]

http://forum.gsplayers.com/showpost.php?p=856600&postcount=83
Oh you mean the rep that you didn't give a shit about.

Again, that was MY rep comment, you dumbass.

What else do you have?

[Tsa`ah]

So you just decided to leave an anonymous rep comment 21 minutes after posting at 1:23, and not make another post for another 76 minutes?

Is there any particular reason you feel the need to launch yourself into this?

[Clove]

So you just decided to leave an anonymous rep comment 21 minutes after posting at 1:23, and not make another post for another 76 minutes?

Is there any particular reason you feel the need to launch yourself into this?That's pretty compellling.

Personally I refuse to believe that was the only neg rep you got that day. Frankly, I don't know how you stay positive.

[CrystalTears]

What in the world are you talking about? I gave you rep yesterday and didn't post in this thread until today.

[Tsa`ah]

That's pretty compellling.

Personally I refuse to believe that was the only neg rep you got that day. Frankly, I don't know how you stay positive.


http://forum.gsplayers.com/showpost.php?p=857359&postcount=112

[Clove]

I've been out of HS for 16 years now ... I haven't given a rat's ass about any sort of reputation, outside of personal and professional acquaintances, for at least 19. Yet somehow you're under the delusion that you rate.

What this boils down to is that I could say liquid water is wet .... you'd argue and start with the flames ... waiting for the squad to come in and defend you when I react.

In any case ... you're still qualified to fold linens for meI think you came in here with the arguments this time. And one tantamount to arguing against water being wet, given the general consensus over the oil bubble this year.

For someone who cares so little about rep, you certainly used it as a springboard to accuse me.

[CrystalTears]

You pointed out the rep. Whether you "care" about it or not as you say, it still irked you enough to respond to it.

Thanks for making the end of my day entertaining anyway.

[Keller]

http://forum.gsplayers.com/showpost.php?p=857384&postcount=130

[Clove]

Hey Keller, Tsa'ah says you're part of the squad now.

[Keller]

http://forum.gsplayers.com/showpost.php?p=857359&postcount=112

http://forum.gsplayers.com/showpost.php?p=857384&postcount=130

[Keller]

Hey Keller, Tsa'ah says you're part of the squad now.

Can we cut PB from the team?

[CrystalTears]

Can we cut PB from the team?
Semi-conservative former squad member?

[Gan]

wow

[Gan]

So you just decided to leave an anonymous rep comment 21 minutes after posting at 1:23, and not make another post for another 76 minutes?

Is there any particular reason you feel the need to launch yourself into this?

You sound suspiciously like Neff (moisthappenings) and his sherlock holmes approach to figure out who gave him negative rep.

Unfortunately its still sounding pathetic, even if it has switched owners.

[Parkbandit]

I've been out of HS for 16 years now ...

Looking at your responses in this thread... are you sure you are out of High School??

I'd like to say I'm shocked.. but I'm not.

"Clove started it by giving me bad rep! Well, I don't know for sure it was Clove.. but who else could it be!?"

:rofl:

[Tisket]

It's not a stretch considering the time and who was on. Get Kranar to confirm that it wasn't him and I'll concede the point.

It was me.

[Tisket]

I don't even know why. I like Tsa'ah. I just like Clove more.

And no, I have not read this entire thread. Fuck that shit.

[Parkbandit]

I don't even know why. I like Tsa'ah.

So YOU are the one.

[Tisket]

So YOU are the one.

Don't judge me!