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Thread: Oil Crushed as IEA Releases 60M in Reserves

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    Re: Oil Crushed as IEA Releases 60M in Reserves

    Quote Originally Posted by Badmutha View Post
    Exactly....

    Where is the "Supply and Demand have no effect on oil prices!" crowd?
    .
    Actually no one argued supply and demand have no effect at all. What people were arguing that future long term unavailable supply does not affect short term future rates. Furthermore, for those with finance educations, the impact of currency hedging utilizing oil as the mechanism in the context of the European debt crisis and institutional investors should tell you something about how supply and demand are merely one part of the oil's price. It's a reason I cited the recent activity in Greece. Pedestrian debaters limit their discussion of oil to supply and demand. Those who actually understand the larger oil market and finance incorporate what can cause huge swings that functionally have little to do with oil demand but everything to do with other economic factors.
    "If your opponent is of choleric temperament, seek to irritate him." - Sun Tzu

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    Re: Oil Crushed as IEA Releases 60M in Reserves

    Quote Originally Posted by pbrauer View Post
    There is no problem with supply, the problem is the speculative nature of the commodities markets today. The fat cats on WS use computers make trades and while they reap $billions in profit the public is screwed.
    I'd actually blame insitutional investors more then Wall Street. Pension funds like CALPERs have enormous weight they can throw around like nobody's business. Even a small fraction of CALPER's pension funds invested in oil as a currency hedge could swing short term prices significently. In that aspect, "speculation" is rampant, but not in the sense of speculating on oil itself. Currency hedging is more about protecting assets from currency fluctuations by sitting in an asset largely immune so such changes. In that aspect, the price of oil has basically little to do with supply and demand.
    "If your opponent is of choleric temperament, seek to irritate him." - Sun Tzu

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    Re: Oil Crushed as IEA Releases 60M in Reserves

    Quote Originally Posted by obvious Child View Post
    Actually no one argued supply and demand have no effect at all. What people were arguing that future long term unavailable supply does not affect short term future rates. Furthermore, for those with finance educations, the impact of currency hedging utilizing oil as the mechanism in the context of the European debt crisis and institutional investors should tell you something about how supply and demand are merely one part of the oil's price. It's a reason I cited the recent activity in Greece. Pedestrian debaters limit their discussion of oil to supply and demand. Those who actually understand the larger oil market and finance incorporate what can cause huge swings that functionally have little to do with oil demand but everything to do with other economic factors.
    It's more accurate to say that because the world is dependent on oil, and oil is controlled by a cartel, that ultimately through the control of the PROCESS of getting oil from the ground to the delivery trucks. The supply and demand factor is more like "because they control the supply" as a whole, they can manipulate the price wherever they want, and oil at different price-points will impact different parts of the world differently.

    Ex : Oil price goes up, causes food prices to go up, putting food beyond the reach of the poorest, and then there is unrest in a country like Egypt, which pushes oil up a bit further causing the uprising in Yemen, Libya and others. UNTIL the riots in the middle east erupt to the point where the oil supply is cut off in the region, and THAT WEEK there will be such massive oil finds across north america to reopen the taps... and nobody will question where it all came from, because they will be happy just to be able to drive to work again, EVEN IF it means close to double what you're paying at the pump.

    People don't like to believe it, but across north america there are AT LEAST 5-6 locations that completely negate saudi-arabia... and that's not counting Alberta's tarsands, OR Texas, and a good portion of it is light sweet crude... but runs the scale, but people will NOT pay any less for it...

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    Re: Oil Crushed as IEA Releases 60M in Reserves

    Quote Originally Posted by pbrauer View Post
    No, greed is their motivation.
    And, we need The One to come in and save us?

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    Re: Oil Crushed as IEA Releases 60M in Reserves

    Quote Originally Posted by Captain America View Post
    Stripping EPA restrictions would also give a bump to the health industry, especially businesses that deal in cancer and respiritory illnesses. Lawyers would get a big bump handling the lawsuits. The birth rate would probably decrease and infant mortality would increase. Less welfare babies. Work fatalities would increase thus creating more job oppertunity. And we would have an ideal work place to send the kids, that can't afford to pay for school,to everyday.

    Man, I say we just slop the planet up and rent out the upstairs to a herd of swine. There are just too many advantages to letting the planet go to hell in a hand basket to ignore. Why the **** should we care? Before it get's beyond inhabitable, we'll be dead anyways.

    Just kidding. I'm just patronizing J-mac. I am always looking for new friends.

    Oh ok, well since you put it that way, sure, lets just cut off the greatest driver of a nations economy, energy and just wait for the day when the heat doesn't come on. Meanwhile we can put all our hope in some piece of glass in the desert pointing at the sun, and hope that clouds never form. Oh, and food? Well that will be a thing of the past unless you are capable of making your own because transportation is halted.

    Your crystal ball scenario of apocalyptic chaos if we were to increase exploration, production, and refining capability is staggeringly obtuse. Outside the energy thingy, what the hell do you think of nearly everything you use, from this keyboard to the mother board in that oil based product you are spewing the nonsense I just read from you came from huh? Windmills make lousy keyboards.

    I love to hear of new innovation in energy, and that they are moving forward in development, but in the mean time it is insane to cut off what we have.

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    Re: Oil Crushed as IEA Releases 60M in Reserves

    Catch me if you can.

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    Re: Oil Crushed as IEA Releases 60M in Reserves

    Quote Originally Posted by BmanMcfly View Post
    It's more accurate to say that because the world is dependent on oil, and oil is controlled by a cartel, that ultimately through the control of the PROCESS of getting oil from the ground to the delivery trucks.
    I'd say that was true about 10 years ago. OPEC is becoming somewhat a non-viable entity. They cannot even agree on output in the last meeting, forcing Saudi Arabia to basically cheat on their quotas. OPEC can set a price floor (within reason considering how Iran and others are dying for money right now), but it can't set a price cap. It used to be able to do both with ease.

    The supply and demand factor is more like "because they control the supply" as a whole, they can manipulate the price wherever they want, and oil at different price-points will impact different parts of the world differently.
    Yes and no. Russia and Canada basically go along because it's in their interests at the moment. But I'd still reckon that the impact of currency hedging is massive upon the price of oil. It could be argued either way based on the European debt crisis how institutional investors should go though.

    Ex : Oil price goes up, causes food prices to go up, putting food beyond the reach of the poorest, and then there is unrest in a country like Egypt, which pushes oil up a bit further causing the uprising in Yemen, Libya and others.
    Egypt is a bit player in oil these days. Most of its oil production is domestically consumed. Furthermore, the riots in Egypt never affected the Suez which is arguably the most important aspect of Egypt in the oil argument. As for Libya, it seems that the market has priced in the lack of its low sulfur crude and compensated for its absence. The real issue of oil going up is it drags down growth across Asia, Europe and North America which in turn slows growth everywhere else. Which amusingly drives down demand for oil and its price.

    UNTIL the riots in the middle east erupt to the point where the oil supply is cut off in the region, and THAT WEEK there will be such massive oil finds across north america to reopen the taps... and nobody will question where it all came from, because they will be happy just to be able to drive to work again, EVEN IF it means close to double what you're paying at the pump.
    That's probably true.

    People don't like to believe it, but across north america there are AT LEAST 5-6 locations that completely negate saudi-arabia... and that's not counting Alberta's tarsands, OR Texas, and a good portion of it is light sweet crude... but runs the scale, but people will NOT pay any less for it...
    Not sure about "completely." It costs Saudi Arabia something like $2 to drill a barrel of low sulfur oil. Canadian tar sands is well above that as are Texas fields. Furthermore, unless we were able to get all of that oil out at once, OPEC would still be somewhat more of price setter.
    "If your opponent is of choleric temperament, seek to irritate him." - Sun Tzu

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    Re: Oil Crushed as IEA Releases 60M in Reserves

    Quote Originally Posted by obvious Child View Post
    I'd say that was true about 10 years ago. OPEC is becoming somewhat a non-viable entity. They cannot even agree on output in the last meeting, forcing Saudi Arabia to basically cheat on their quotas. OPEC can set a price floor (within reason considering how Iran and others are dying for money right now), but it can't set a price cap. It used to be able to do both with ease.
    I can't really disagree with you here, because the member countries are getting to the point of reaching that "peak oil" point (and that is localized peaks and NOT the "global" peak oil that gets discussed by those who describe the beginning of the end of oil)...

    Yes and no. Russia and Canada basically go along because it's in their interests at the moment. But I'd still reckon that the impact of currency hedging is massive upon the price of oil. It could be argued either way based on the European debt crisis how institutional investors should go though.
    On Russia, remember before the 2008 crisis when oil prices spiked to around 150$ per barrel?? Well, Russia was the reason for the prices eventually coming down because of the dozens of super-deep oil wells they drilled, and they can keep these quiet if there's a spill because they are on land, unlike when BP tried to replicate this drilling in the gulf of mexico, and we all know what happened there... So, Russia is now the worlds largest oil producing nation.

    On Canada, the oil sands are canada's functional oil producing region, and you're right, it's not a great quality of oil as far as the scale goes. That is NOT all of Canada's oil. British Columbia has MASSIVE amounts of oil underneath those mountains that's undeveloped. Also, a few years ago they started working on developing oil fields in saskatchewan, but out of those two I'm pretty sure it's BC that's got the big ones.

    Look at Alaska though, - The World's Largest Oil Rig to Be Built in Alaska! | Drudge Retort
    "Wednesday, June 22, 2011

    The World's Largest Oil Rig to Be Built in Alaska!

    BP has commissioned Parker Drilling to build the world's largest rig to drill the longest horizontal wells yet completed. The Liberty project, for which the rig is being built, involves drilling over 8 miles to reach pockets of oil offshore from Prudhoe Bay Alaska under the Beaufort sea."

    Alaska alone apparently is slated to become the among the top oil producing areas in the world.

    Egypt is a bit player in oil these days. Most of its oil production is domestically consumed. Furthermore, the riots in Egypt never affected the Suez which is arguably the most important aspect of Egypt in the oil argument. As for Libya, it seems that the market has priced in the lack of its low sulfur crude and compensated for its absence. The real issue of oil going up is it drags down growth across Asia, Europe and North America which in turn slows growth everywhere else. Which amusingly drives down demand for oil and its price.
    Yes, this is correct... but I think you missed the point somewhat... so, just allow me some leeway here.

    Here's the long-term strategy, since oil is effectively a finite resource :
    - The US buys oil from the middle east, and the massive consumption rate for these countries will dwindle the levels of their resources, and in turn these countries ALSO invest in things like US T-bills, and so on.

    - Let these countries drain their reserves for decades while quietly building the infrastructure for the big finds across north america, and use environmental rules to limit the competition to the biggest companies...

    - NEXT, through manipulation of the prices of oil through various means, this causes unrest in the middle east through food prices... first was Egypt, which did nudge the price up SOME, which was enough to kick-start the revolutions next door, which were even larger because these neighboring countries saw the "success story" of Egypt (which BTW is under a martial law still)

    - This unrest will eventually cause a failure in the supply chain of oil... this is the piece that will knock down SEVERAL dominoes in a single shot.

    - From here the shortage of oil will immediately halt what is left of the american economy, and the economies of much of the rest of the world, and all the chaos that will ensue

    - Then, to play the part of the saviors these people will come out, "well, we have a way to get the oil, but it will mean drilling in some nature preserves, so we can't have any environmental liability"

    - After the world war dies down the world will start to rebuild under a "new world order" because the people will be willing to do anything to end the horrors.

    For the final part of that quote, yes, the depression this time IS a global one... and we've only really seen the tip of the iceberg... but look at how it works, as Gerald Celente points out... back in the 30's it was :
    - Depresssion
    - Currency wars (we are here)
    - Trade wars
    - Real wars


    Not sure about "completely." It costs Saudi Arabia something like $2 to drill a barrel of low sulfur oil. Canadian tar sands is well above that as are Texas fields. Furthermore, unless we were able to get all of that oil out at once, OPEC would still be somewhat more of price setter.
    Ya, but you're going to be paying about 150-200$/barrel for oil at that point... Last number I heard was 47$ / barrel for canadian oil to produce.

    Oh, and the last point you are missing here : Once the saudi's get taken out, they are no longer going to be an oil producing nation.... the middle east is going to go back to being groups of nomadic camel riders.

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    Re: Oil Crushed as IEA Releases 60M in Reserves

    Production data


    Consumption data


    If only there were a link that shows people how to properly interpret this data
    It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
    "Wealth of Nations," Book V, Chapter II, Part II, Article I, pg.911

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    Re: Oil Crushed as IEA Releases 60M in Reserves

    Catch me if you can.

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