It's official: The Oil Boom Is Over

[soupcxan]

Oil below $96 this morning, in spite of a weaker dollar. Yikes.

 

[REWahoo]

In the immediate aftermath of a major hurricane in the gulf it's interesting to observe oil continues to drop in price. Down $5 over the weekend to $96.

Guess we've moved on to the next crisis...

 

[FinanceDude]

In the immediate aftermath of a major hurricane in the gulf it's interesting to observe oil continues to drop in price. Down $5 over the weekend to $96.

Guess we've moved on to the next crisis...

Except gasoline in my area went up 20-30 cents literally overnight last night.........

 

[CitricAcid]

Gasoline may move separately from oil for a while during hurricane Ike, but a little longer the gasoline prices should fall, as long as ziggy's prediction is out there.

 

[Gardnr]

Gasoline may move separately from oil for a while during hurricane Ike, but a little longer the gasoline prices should fall, as long as ziggy's prediction is out there.

Yep. Many refineries shut down for a while putting a bit of a crimp on the gasoline supply.

 

[audreyh1]

Crude oil below $92!

Audrey

 

[harley]

Well, it was Bike Week here in Ocean City this week, and the price of gas went up 10 cents. So I guess the market charges what it can bear, no matter what te underlying costs are. I bet the price drops big time this week when all the [-]suckers[/-] bikers go home.

 

[cute fuzzy bunny]

Crude oil below $92!

Didnt someone say that it was headed to the $70-80 range just a few months ago?

 

[hankster]

That's what I was thinking. It looks like CFB's prediction is coming to pass!

 

[al_bundy]

Didnt someone say that it was headed to the $70-80 range just a few months ago?

me

looked at the oil charts earlier in the year and it looked like a head and shoulders forming up

week or two ago i looked at the charts to see if i might catch a bounce but they look pretty bad. gold is looking a little interesting, didn't know why until i read something in the last few days that in past depressions/downturns gold also fell for a while until it turned around. happened in 1873 and 1929 i think, so i'm going to be looking at it.

 

[ziggy29]

Gasoline may move separately from oil for a while during hurricane Ike, but a little longer the gasoline prices should fall, as long as ziggy's prediction is out there.

My ears are burning. Just got back from vacation in Alaska and I see the magic is still working.

Still long on my USO position, now down about 36% from where I bought it. At this point I see no reason to sell. Hopefully I can keep oil prices down as long as I maintain this position. If so, my plan has worked to perfection.

 

[al_bundy]

just looked at the XLE chart, looks interesting

will have to check it along with USO later

 

[soupcxan]

But in this case, I figure it's a win-win: if oil keeps rising, I cushion the downside on the rest of my portfolio. If my investment succeeds in causing the bubble to pop, the rest of my portfolio's recovery will likely dwarf my losses in USO.

Situation: I've prepared a helpful chart indicating when you purchased USO and the subsequent performance. It seems to me that you not only succeeded in popping the oil bubble, but every other single bubble out there, including assets that we didn't even know were bubbles.

If so, my plan has worked to perfection.

Analysis: However, the second part of your investment thesis, that the rest of your portfolio (and mine & everyone else's) will recover, still needs some work.

Recommendation: Ziggy should buy one of those UltraShort 2x S&P funds (the ones that short the market with 200% leverage) to get the rest of us out of this mess. If possible, he shoul buy them on margin to acheive 4x leverage to speed the recovery.

 

[Leonidas]

Situation: I've prepared a helpful chart indicating when you purchased USO and the subsequent performance. It seems to me that you not only succeeded in popping the oil bubble, but every other single bubble out there, including assets that we didn't even know were bubbles.

I love the skull and bones symbol. It would be appropriate applied liberally across the charts of most of my holdings.

 

[ziggy29]

I love the skull and bones symbol. It would be appropriate applied liberally across the charts of most of my holdings.

It's also a good label for what this market has me drinking, along with the "XXX".

 

[audreyh1]

Situation: I've prepared a helpful chart indicating when you purchased USO and the subsequent performance. It seems to me that you not only succeeded in popping the oil bubble, but every other single bubble out there, including assets that we didn't even know were bubbles.

Yes! It's all Ziggies fault! He single-handedly precipitated this global financial meltdown!

Audrey

 

[cute fuzzy bunny]

But gas is getting cheap!

 

[HFWR]

$2.98 yesterday at Costco!

 

[Independent]

So will Americans rush out and buy trucks again, especially now that they can buy them at big discounts?

Or, will they decide that gas is going to be expensive in the long run and continue the shift to higher milieage cars?

 

[cute fuzzy bunny]

So will Americans rush out and buy trucks again, especially now that they can buy them at big discounts?

If the stock market hadnt just...ummm.."had a selloff" and the economy was a bit better, I'd say yes. If things pick up again before next May, most certainly.

Same thing that happened 2 years ago when gas spiked from $1.80 to $3 and then went back down to $2. Everyone was dumping their big trucks and paying $4-5k over sticker for a Prius, and when it went back down, everyone went back to buying SUV's.

Shoot, if I needed a car I'd go buy myself a suburban or an expedition or a sequoia right now. Heck, you can get a well equipped sequoia brand new for ~25k or less right now.

Considering I drive about 5k miles a year, who cares what the gas mileage is?

 

[REWahoo]

So will Americans rush out and buy trucks again, especially now that they can buy them at big discounts?

Or, will they decide that gas is going to be expensive in the long run and continue the shift to higher milieage cars?

I've seen several discussions of this and it appears the "experts" are saying gas prices went up so high and so quickly that the driving habits of the American public have been permanently altered. Most people (include me in this group) don't believe the reduced gas prices will last long and won't forget the pain they experienced at the pump. Plus the soon-to-be-available new hybirds and plug-in electric vehicles will also play a major part in changing habits.

Time will tell.

 

[cute fuzzy bunny]

I think oil will be low until May, when we'll get the summer run up to $4 for no apparent reason, then it'll settle back down to ~$3. The folks who are tempering us towards higher gas prices might skip a year, but the high prices will be back. Just not this year.

I dont think anyone has 'learned their lesson'. Thats not in our DNA anymore. People will buy based on circumstances of the moment, not forecasts.

 

[FinanceDude]

So will Americans rush out and buy trucks again, especially now that they can buy them at big discounts?

Or, will they decide that gas is going to be expensive in the long run and continue the shift to higher milieage cars?

You can't get auto financing due to the credit freeze, so it should continue to fall........

 

[cute fuzzy bunny]

Looks like quite a few of the car companies are offering zero percent on many of their vehicles, including the big trucks.

 

[haha]

It seems like everything must be a directional bet. The idea that one should buy and passively hold a "well diversified" portfolio is toast IMO.

For me, the safest directional bet right now is on well capitalized oil service firms. They have been massacred in the last few weeks; way beyond what has happended to crude or even NG. Some of them are down 80% within the year. They are more accustomed to surviving in boom and bust environments than perhaps any other segment of industry. They are worldwide, and they are cash generative.

If oil goes to $30 they will struggle, but they survived oil in the low teens in 2001.

If oil goes to $30 and stays for any time, it would be a sign of extreme cutbacks in world growth and output.

I believe that within this area the safest are likely to be the strong firms with good moats that are not pure drillers.

A sign of the times- Aubrey McClendon, founder and CEO of Chesapeake Energy, the largest NG producer in the US, was forced to sell substantially all of his very large stake in this company by margin calls.

This is the bell ringing, IMO.


Ha