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Oil price decline
Old 10-02-2008, 11:32 AM   #1
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Oil price decline

Remember a few short months ago when $200 oil was just around the corner?

"(MarketWatch) -- Merrill Lynch cut its 2009 oil price forecast to $90 a barrel from $107 a barrel and warned that a "synchronous global recession" could bring oil prices to $50 a barrel. It said U.S. oil demand is far outpacing its decline expectations, European demand is falling rapidly, and some of the emerging markets aren't keeping up either. Plus, a string of fields in Saudi Arabia, Qatar and others will bring about 3 million barrels of oil a day in incremental capacity over the next 12 months."
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Old 10-02-2008, 11:47 AM   #2
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Remember a few short months ago when $200 oil was just around the corner?
You're welcome.
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

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Old 10-02-2008, 12:33 PM   #3
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Can't wait for other fuels to follow ... been looking at cordwood: $330 - 380/cord. Up 50% from last year; at that rate gas/oil may be cheaper (to heat the house)!
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Old 10-02-2008, 12:37 PM   #4
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You're welcome.
If it hits $50 I'll be able to afford the gas to drive up and buy you a beer.
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Old 10-02-2008, 12:43 PM   #5
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If it hits $50 I'll be able to afford the gas to drive up and buy you a beer.
Assuming you don't have to withdraw from your IRA to buy it, anyway.
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

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Old 10-02-2008, 01:15 PM   #6
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Fight the good fight Ziggy.
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Old 10-02-2008, 01:15 PM   #7
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I heard Donald Trump say just the other day that oil prices will drop like a rock, in the $20 range. Boone Pickens just yesterday said OPEC will cut supply enough to hold oil close to $100. But who knows? Pickens has been wrong before. The below from bloggingstocks.com

Posted Sep 24th 2008 9:45AM by Douglas McIntyre
Filed under: Forecasts, Commodities, Oil
The large hedge fund run by Texas energy king T. Boone Pickens has lost $1 billion this year. He bet that oil would go up. Instead, it went down. That makes his push for wind power and the use of natural gas to run cars look a little silly.
According to The Wall Street Journal," the downturn in energy has blindsided the industry veteran, leaving one of his hedge funds that focuses on energy stocks down almost 30% through August." Pickens says that oil will move back up unless the global economy goes into a very deep recession.


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Old 10-02-2008, 01:16 PM   #8
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If oil drops to $50, will the then current administration insist on sending foreign aid to the supplying countries so they don't suffer from our selfish reductions in consumption?
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Old 10-02-2008, 01:18 PM   #9
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I heard Donald Trump say just the other day that oil prices will drop like a rock, in the $20 range.
Seems hard to believe, but he was right about Rosie O'Donnell, so maybe he'll be right about this one, too -- at least as a temporary recessionary oversold landing point. No way it settles there long term, though.
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

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Old 10-02-2008, 01:19 PM   #10
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If oil drops to $50, will the then current administration insist on sending foreign aid to the supplying countries so they don't suffer from our selfish reductions in consumption?
Wont drop to 50 by the next administration.
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Old 10-02-2008, 01:23 PM   #11
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Wont drop to 50 by the next administration.
I think I said the "then current" (as in whoever is in charge at the time it hits $50) administration.

Looking...looking...looking... Yep, that's what I said!
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Old 10-02-2008, 01:27 PM   #12
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I think I said the "then current" (as in whoever is in charge at the time it hits $50) administration.

Looking...looking...looking... Yep, that's what I said!
Its ok. Im dumber than normal today.
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Old 10-02-2008, 01:53 PM   #13
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Its ok. Im dumber than normal today.
....nm....
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Old 10-02-2008, 01:59 PM   #14
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Old 10-02-2008, 05:52 PM   #15
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I guess the good news is that you'll be able to buy those high gas mileage econoboxes and hybrids for pretty cheap money in a little while.

or you'll have plenty of cheap gas to put in the giant SUV or hummer you can buy right now for next to nothing.
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Old 10-02-2008, 06:26 PM   #16
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Them sonsof... It was a conspiracy to get me to lock in my heating oil at high prices. $4.75 a gallon!
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Old 10-02-2008, 08:00 PM   #17
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I heard Donald Trump say just the other day that oil prices will drop like a rock, in the $20 range. Boone Pickens just yesterday said OPEC will cut supply enough to hold oil close to $100. But who knows? Pickens has been wrong before.
He sure has, but my money is on him. Recession will always knock down commodities. You can wait until one comes to buy, and maybe miss the whole bull market, or just realize that there will perhaps be some pain along the way.

But is there any chance that in a modern economy like the US that a barrell of oil will be worth much less than say, $75, for long? If we have a permanent recession, I suppose so- but isn't a long resession what Bernanke has spent his life learning how to avoid? And at $75, there are many profitable oil and gas and service investments.

I give very little credence to stories of large increases in production. What is going on is recession induced demand destruction, along with unwinding of over-extended long positions by hedge funds.

Demand won't stay down for long, unless the Chinese and Indian decide that they don't want 1st world economies after all.

It's one big head fake, albeit one that might go on for a while. Interesting aside is that in all this mess, I have only a few unaffected stocks. Some tobacco, some pharma and blue chip consumer products- and the pipeline that hauls most of the crude from western Canadian tar sands projects. It sits like a rock.

Ha
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Old 10-02-2008, 08:32 PM   #18
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He sure has, but my money is on him. Recession will always knock down commodities. You can wait until one comes to buy, and maybe miss the whole bull market, or just realize that there will perhaps be some pain along the way.

But is there any chance that in a modern economy like the US that a barrell of oil will be worth much less than say, $75, for long? If we have a permanent recession, I suppose so- but isn't a long resession what Bernake has spent his life learning how to avoid? And at $75, there are many profitable oil and gas and service investments.

I give very little credence to stories of large increases in production. What is going on is recession induced demand destruction, along with unwinding of over-extended long positions by hedge funds.

Demand won't stay down for long, unless the Chinese and Indian decide that they don't want 1st world economies after all.

It's one big head fake, albeit one that might go on for a while. Interesting aside is that in all this mess, I have only a few unaffected stocks. Some tobacco, some pharma and blue chip consumer products- and the pipeline that hauls most of the crude from western Canadian tar sands projects. It sits like a rock.

Ha
I agree. I had been looking for an entry point into PCRDX (Pimco commodity) for a year now and it is getting cheap enough for me to consider pouncing on it...
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Old 10-02-2008, 08:39 PM   #19
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I find it interesting that oil is down about 35%, but gas prices are only down 12-15%. It sure goes up in lockstep, but I guess there's no relationship on the way down.
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Old 10-02-2008, 08:43 PM   #20
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I find it interesting that oil is down about 35%, but gas prices are only down 12-15%. It sure goes up in lockstep, but I guess there's no relationship on the way down.
Another interesting thing which I can't really interpret is that the stand alone refiners are getting killed in the market. If they are making a lot on money, it seems that the market can't see it yet.

Ha
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