Originally posted by MikeboydUS
As far as I know there have been no real supply issues, like were running out oil.
Macro-supply info doesn't make the headlines on a daily basis, but it is available if we search for it. The movers & shakers are way-out in front on
supply developments...we see this reflected in price.
The rapid YOY decline in production levels from Mexico' Cantarrel field is a good case-in-point (one of the 4th largest fields in the world).
Mexico' economy is highly dependent on oil revenues...oil profits support the majority of Mexico' national programs. I'd rather not broach the
implications that declining Cantarrel production holds for the immigration issue.
Prudhoe Bay/North Slope...drying-up.
North Sea...depletion rates escalating.
Russia reports 1st production decline in 10yrs.
New feasible, recoverable discoveries lagging global growth/demand...remaining resources...more expensive to reach/extract/process.
The oil companies catch a-lot of flack for not investing in new refineries (30yrs). Big oil blames the environmentalists/cost. Maybe, just maybe...big
oil has known since the seventies that there won't be additional supply to refine? Jus thinking out loud here. The new refineries are being built in
oil producing countries, close to supply...the US is destined become a net importer of finished gasoline products. The remainder are being built to
process Heavy-Mayan...is that what's left? Jus thinking here
I have seen problems in Nigeria and the mess in Iraq has slowed down the production of petroleum, but they do not justify the current
With respect to price, geopolitical events are temporary 'noise' in the greater uptrend. Wait till hurricane season arrives
I forgot to mention declining Iraqi production...but that's more situational than permanent imo...thanks.
Doubling in one year? Come on. Our currency has only fallen around 20 cents to the Euro since last year. That is simply not enough to warrant
these idiotic prices. The same goes for food prices as well.
I think it's closer to .25 in the past 12 months. The EUR/USD has appreciated 7% so far this year...9.5% in 2007. 16.5% is a whole lotta love in a
year and a half. I was one of the posters at $80 a few months back...predicting that $100 bbl oil will look cheap by the end of 08. I made that
assessment based on the Dollar chart...and the fact that producers won't abide the loss of purchasing power relative to the weak USD. So I agree
there is some hanky-panky being played at the OPEC spigot. The USDX posted another historic low last month...in my opinion, aside from the occasional
overbought relief-rally...Uncle Buck still has a ways to the downside...commodities to the upside...years in fact.
The whole situation is a fraudulent scam.
Specs always catch the wrath first. Ask a cash-strapped farmer, needing to lock-in a futures price, so he can take that piece of paper to the
bank...pay for crop insurance...and borrow enough to buy fertilizer & equipment to bring in harvest...ask him what he thinks about the "spec"
that's willing to assume the risk that allows him to continue
At the bottom of the price pyramid...it's about supply/demand (which can be manipulated). Specs contribute...but basically grease the wheels imo.