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Old 07-17-2008, 02:00 PM   #61
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Insurance salesman?
Could be. And it's exactly the time you'd expect to see someone pushing annuities. With a lot of people worried about their falling 401Ks not surviving their retirement, what better time to sell a crappy high-fee and low-return "an income stream you can't outlive" annuity than when you can prey on fears about the market and the security of their retirement?
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Old 07-17-2008, 02:07 PM   #62
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Just checked and oil is down another five bucks today. Ziggy, you're my hero.
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Old 07-17-2008, 02:17 PM   #63
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I think its going to go a good bit lower and then stay there for a while...
Boy, wouldn't that be wonderful. Stock market would have a good chance to rally and as a result, give some of us chickens a chance to trim back our equity positions. Also give me a chance to re-enter my natural resource fund at a decent price along with giving us all a break at the pumps! Only problem, just sounds too good to be true.
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Old 07-17-2008, 02:22 PM   #64
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Eh, we'll see. I'm pretty sure we'll go through $100 and might even hit $80.
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Old 07-17-2008, 02:34 PM   #65
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Eh, we'll see. I'm pretty sure we'll go through $100 and might even hit $80.
Wow - you're confident! I'll be really shocked to see oil go below $100.

In fact, if it does go below $100, that might be because we are in a really, really bad recession, and I sure don't hope for that outcome.

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Old 07-17-2008, 02:34 PM   #66
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We need to set a standard when we will proclaim ziggy's power very influential and as such be elevated to our savior. Is a 15% drop satisfactory? I think right now it's at -8.8% or so since he said he bought, I am tracking this with great curiosity. If USO breaks through $100, his karma will be outstanding.
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Old 07-17-2008, 02:40 PM   #67
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Wow - you're confident! I'll be really shocked to see oil go below $100.
So far I havent really seen any concrete reasons for it to stay over $100 long term. I'm more surprised it went as high as it did.
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Old 07-17-2008, 03:12 PM   #68
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So far I havent really seen any concrete reasons for it to stay over $100 long term. I'm more surprised it went as high as it did.
I agree with CFB. I have some insights into the oil market and there is nothing that resembles a shortage. There is plenty of oil on the market. Saudi Arabia is correct that they are meeting all of the demand. There has been an immense amount of "risk" factored into the price. This risk premium is driven by the speculators and hedgers.

BTW, the weekly oil inventory reports are meaningless. The changes of several million barrels is a very small percentage of the total inventory of crude, gasoline or distillates. Every manufacturer is trying to minimize their working capital so the want these numbers to be as low as they can get them and still run their business. Now I would worry if a big refinery announces that they are cutting crude runs due to supply issues not related to maintenance or weather.

The big oil companies are doing their longterm investment plans with numbers in the order of $40 to $60/BBL. They wouldn't drill a well that needed $100 oil to payout.
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Old 07-17-2008, 03:17 PM   #69
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I guess one reason for oil to drop big time would be that the US dollar finally starts to rise. Now that would be good news all around!

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Old 07-17-2008, 03:41 PM   #70
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I know there are a lot of factors involved in pricing at the pump, but the price on the corner ($4.29) is not going down at all yet although of course it went up in concert with oil prices. That drop will signal to me on a personal level that the oil boom is over....
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Old 07-17-2008, 04:52 PM   #71
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So far I havent really seen any concrete reasons for it to stay over $100 long term. I'm more surprised it went as high as it did.
You, me and just about everyone else have been thinking that, but it kept going up. I would love to see it go sub-$100, but I've lost any confidence I had in my ability to predict the price movements short to medium term.
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I guess one reason for oil to drop big time would be that the US dollar finally starts to rise. Now that would be good news all around!
That would be sweet. I'm not a technician and only do charts in kind of a big strokes way, but looking at the USD index I see that it stopped it's plummet a couple of months ago and has been sort of bobbling around with two shots at going higher. What's that old saying, there's no such thing as a triple top or bottom?

I would love to see the combined moves of the dollar going up and oil going down, but I worry that those would be short term moves. Long term, I think oil is going to be plenty expensive, and I see a lot of resistance to the dollar being as healthy as we would like.
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Old 07-17-2008, 05:26 PM   #72
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I think you're going to see a rising dollar, dropping oil, a rising US stock market, and lowering inflation.

We'll all live happily ever after, enjoy delightful dreams and long lazy summer days that last 25 hours a pop.

And we wont hear from anybody about how the sky is falling at least until the next mini bear market...
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Old 07-17-2008, 05:46 PM   #73
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I think you're going to see a rising dollar, dropping oil, a rising US stock market, and lowering inflation.

We'll all live happily ever after, enjoy delightful dreams and long lazy summer days that last 25 hours a pop.

And we wont hear from anybody about how the sky is falling at least until the next mini bear market...
Man after reading that. I can come out of the bunker and sleep well tonight!
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Old 07-17-2008, 06:27 PM   #74
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If you see a prediction that makes you feel uncomfortable because of your recency bias, then just maybe you should take it seriously. It wasn't that long ago that predictions of $80 oil seemed way out there. Now some of us are having a hard time believing in sub-$100 oil. I haven't seen any good data that would convince me of any particular price for oil. All the news seems to be filled with what's going to budge it up or down -- those Nigerian guys (especially the ones with the web scams) must be having a good laugh at us.

I recall that during the dot-com craze some analyst said that Cisco was going to have a few problems, something about inventories I think. This was met with howls of disbelief. Too many were convince the momentum would last forever. The analysis was sort of missing in much of that era. Seems there are parallels with commodities today.

Perhaps stocks will end the year overall on the plus side. It happened in 1987 despite the crash.
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Old 07-17-2008, 06:31 PM   #75
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If you see a prediction that makes you feel uncomfortable because of your recency bias, then just maybe you should take it seriously. It wasn't that long ago that predictions of $80 oil seemed way out there. Now some of us are having a hard time believing in sub-$100 oil. I haven't seen any good data that would convince me of any particular price for oil. All the news seems to be filled with what's going to budge it up or down -- those Nigerian guys (especially the ones with the web scams) must be having a good laugh at us.

I recall that during the dot-com craze some analyst said that Cisco was going to have a few problems, something about inventories I think. This was met with howls of disbelief. Too many were convince the momentum would last forever. The analysis was sort of missing in much of that era. Seems there are parallels with commodities today.

Perhaps stocks will end the year overall on the plus side. It happened in 1987 despite the crash.
Whats scary.. Is I really don't know. To me oil going to 200 is just as probable that it hits 50. Thats how ignorant I am. Im working on it though


I know the ignorant part must surprise a lot of you..
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Old 07-17-2008, 06:42 PM   #76
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The Russians were saying something like $230 for oil. The Saudis were saying $70. I don't trust any of those guys. Would someone point me to the data that shows the complete inventory picture for oil & gas & alternative sources? I don't think it exists outside of high priced sources. Luckily we can all watch the price though which incorporates all the present supply-demand. But that doesn't say anything about tomorrow (unless you believe in technical analysis, heads-and-shoulders, double bottoms, resistance mumbo-jumbo).

I'll get off my soap box now .
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Old 07-17-2008, 08:05 PM   #77
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If you see a prediction that makes you feel uncomfortable because of your recency bias, then just maybe you should take it seriously. It wasn't that long ago that predictions of $80 oil seemed way out there. Now some of us are having a hard time believing in sub-$100 oil. I haven't seen any good data that would convince me of any particular price for oil. All the news seems to be filled with what's going to budge it up or down -- those Nigerian guys (especially the ones with the web scams) must be having a good laugh at us.

I recall that during the dot-com craze some analyst said that Cisco was going to have a few problems, something about inventories I think. This was met with howls of disbelief. Too many were convince the momentum would last forever. The analysis was sort of missing in much of that era. Seems there are parallels with commodities today.

Perhaps stocks will end the year overall on the plus side. It happened in 1987 despite the crash.
don't believe what you hear in the media

why would a money manager reveal what he thinks of an asset if he owns it or is currently trading it. grounds for a lawsuit against him

with Cisco the whole time the talking heads on TV were saying Cisco is going back up, they were selling the shares to retail investors who believed them
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Old 07-18-2008, 08:14 AM   #78
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I read that the price of oil contributes to 70% of the price of gasoline at the pump. So an 11% decrease in the price of oil leads to about a 7% decrease in the price at the pump. Hmmmm, let's see if my gas station around the corner drops from $4.11 to $3.82. It has alredy dropped down to $4.07 8)
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Old 07-18-2008, 08:31 AM   #79
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I read that the price of oil contributes to 70% of the price of gasoline at the pump. So an 11% decrease in the price of oil leads to about a 7% decrease in the price at the pump. Hmmmm, let's see if my gas station around the corner drops from $4.11 to $3.82. It has alredy dropped down to $4.07 8)
Selling gasoline and diesel is no different than selling vegetables. The price will be as high as they can get without losing too much business to the next seller. It's basic supply vs demand. Econ 101 stuff - maybe the first week.

Crude oil sets a cost floor that makes all the stations have a base price about the same. They have to figure out where they are on the supply/demand curve.

Different crudes have different gasoline yields and require different refinery equipment/configurations to process efficiently. No crude is like any other and no refinery is like any other. Different stations get crude from different refineries but none of us can really tell the difference in the gasoline without some fairly expensive lab equipment.

I've gotten a kick out of watching diesel prices. Diesel is cheaper to make than gasoline and it used to sell for about 10 - 15 cents/gallon less at the pump. Not now since our friendly EPA mandated ultra low sulfur diesel (<15 ppm at the pump) starting in 2006. For a refinery to make this grade, they would have had to invest $300 - 500 million dollars in 2003. That was a pretty trying time for refiners and many chose not to invest at that time.

The ones that did are now making a fortune (windfall profits?) at the expense of those that didn't. ULSD sells for about 75 cents more per gallon. Most of the refineries that didn't put in the equipment are rushing to get it installed and these will all probably come on line in 2010. I expect the ULSD premium to slowly disappear between then and now. The late adapters will never make the big profits the early adapters did but it's now required to stay in business. Another unintended consequence from our benevolent but immensely stupid Federal government.
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Old 07-18-2008, 08:33 AM   #80
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I read that the price of oil contributes to 70% of the price of gasoline at the pump. So an 11% decrease in the price of oil leads to about a 7% decrease in the price at the pump. Hmmmm, let's see if my gas station around the corner drops from $4.11 to $3.82. It has alredy dropped down to $4.07 8)
A few of the stations that briefly breached $4 here are back down to $3.999.
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