tag:blogger.com,1999:blog-11027528911364475.post7482449680451733941..comments2024-02-18T21:10:05.205-08:00Comments on EconomPic: Oil Price vs. ReservesJakehttp://www.blogger.com/profile/07946497592651234440noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-11027528911364475.post-15445679091661658862009-08-22T11:27:29.323-07:002009-08-22T11:27:29.323-07:00I have absolutely no idea where oil is going. If a...I have absolutely no idea where oil is going. If anything the oil market is all over the place. 140 to 30 back to 70. Some famous tech analyst is now predicting oil at 10$ lol.<br />All I can do is refer to asset allocation 101. When the economy is in the doldrums buy cyclicals and sell commodities!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-11027528911364475.post-19497364185880693042009-08-21T11:04:50.583-07:002009-08-21T11:04:50.583-07:00Just came across this: "High prices now are b...Just came across this: "High prices now are becoming the justification of high prices." That's oil analyst Stephen Schork, on Bloomberg TV & radio this morning. The discussion focuses on how financial markets are interacting with commodities lately, and Schork uses some entertainingly blunt language. Tom Keene gives a shout to the Morse article Izzy picked up on.<br /><br />The podcast should be up later today. Here's a link for the video.<br /><br />http://www.bloomberg.com/avp/avp.htm?N=av&T=Schork%20Says%20Oil%20Is%20Not%20Trading%20on%20Market%20Fundamentals&clipSRC=mms://media2.bloomberg.com/cache/vFqRSVz5JDXs.asfComparedToWhat?https://www.blogger.com/profile/07414759785941444407noreply@blogger.comtag:blogger.com,1999:blog-11027528911364475.post-40318063567519574202009-08-21T08:10:21.518-07:002009-08-21T08:10:21.518-07:00Izabella Kaminska at FT Alphaville is one of my fa...Izabella Kaminska at FT Alphaville is one of my fave bloggers on energy. Here's a relevant post from yesterday.<br /><br />http://ftalphaville.ft.com/blog/2009/08/20/67881/the-not-so-bullish-case-for-energy-prices/<br /><br />Izzy quotes Edward L. Morse to the effect that OPEC spare capacity was the key factor in last year's price explosion (a line The Economist also took if I recall correctly). Morse also believes newly discovered reserves will keep a lid on prices. (Morse's article is behind a pay wall at Foreign Affairs.)<br /><br />mab, if you want to understand how financial markets are interacting with energy prices you really should be keeping up with Izzy but it's daunting, highly technical stuff for the most part though the above post is not.<br /><br />Also mab, you may want to consider how much money was destroyed in the collapse of asset prices and the shadow banking system, and compare that to the relatively small quantities involved in "senseless central bank money creation" as you put it. Check the following post for a start.<br /><br />http://zerohedge.blogspot.com/2009/05/chasing-shadow-of-money.htmlComparedToWhat?https://www.blogger.com/profile/07414759785941444407noreply@blogger.comtag:blogger.com,1999:blog-11027528911364475.post-81383446600682164662009-08-21T03:53:43.809-07:002009-08-21T03:53:43.809-07:00Jake,
So is it increased end user-demand......OR ...Jake,<br /><br /><i>So is it increased end user-demand......OR is it just a technical reaction to traders hoarding oil?</i><br /><br />It's hard for me to believe it's end demand. People are tapped out. <br /><br />When it comes to assets (oil & commodities are now Main St. asset classes via ETFs), rising prices create speculative demand. And senseless central bank money creation fuels the speculative demand. <br /><br />In the exponential credit growth eCONomy, final/true end demand is a joke. Take housing. During the housing bubble we built millions and millions of homes for which there was no end demand. How do I know? Simple - the number of unoccupied units soared to just under 20 million (15% of the housing stock)! It was all speculation (and greed). But NO one could see it coming. <br /><br />Be it inflation, deflation or both, I'm quite certain Bernanke's casino eCONomy will make the majortiy poorer.mabnoreply@blogger.com