Oil at $135

[godoftrading]

Oil to NEVER hit $135.00

here is why...

1-Many will continue to profit take as price target of $135 was hit
2-Dollar is getting stronger
3-Commodity bubble about to burst
4-there will be HUGE after memorial day sell off...watch for it...will start tomorrow, Friday May 23 ,2008
5-Next Wed EIA report will be massively bearish stating overstock of inventory...
6-monthly supply reports should show back up of inventory
7-when it begins, watch out, will fall hard...
8-much of upward price momentum has been short covering rally
9-Venezuala issues appear to be a 'non issue'
10-Iran supply issues are 'not there'
11-market did not budge when congress said no more stock piling invenotry
12-"irrational exuberance" in Oil cannot continue
13-gas prices will rise and demand will lessen thus ending demand for Oil
14-Green options (non Oil required...I.e. Wind farms etc.) will continue to grow
15-COT report will begin to show this...this lack of demand for Oil
16-the "prophetic" future contracts in months, years to come are price less then the current front month contract...so, traders are expecting that Oil price will and should decline!!!
17-Brent Crude is almost same price as WTI Crude thus indicating the 'devaluing' of the WTI Nymex product...
18-China etc.cannot keep current pace of 'craving' for commodities such as Oil etc.
19-Ethanol boom will become a 'bust' thus creating desire for 'purer' return to gas and normal Oil supply/demand
20-Inflation to be proven 'non issue' and price of Oil comes down as economy strengthens

 

[Grizz]

Good recipe for discussion, and mostly I agree, especially on ethanol being a dud that we'll all look back at and wonder why so many got behind the idea.

The 2 points that I can't get behind follow:

#18 I'm not sure how one can presume that China, India, etc. will slow their pace of growth. I think that to make a guess at this is easy, but an educated one is impossible since there is no historical yardstick to measure against. The 1800's belonged to Europe, the 1900's was obviously ours, and it is becoming apparent that this century will belong to the BRIC countries. They dwarf us in population, they want the same toys and comforts that we've enjoyed for so long, and they have a long way to go before they reach our standard of living.

#20 Inflation fears in the U.S. may have seen an over reaction but America's debt is rising incredibly quickly. Since sound fiscal policy like raising taxes, social program cuts, or cutbacks to the civil service tend to make politicians unpopular, they'll keep printing those greenbacks to service debt thereby devaluing each dollar in circulation. Unless radical changes are made, this will cause ever increased levels of price inflation.

 

[mathjak107]

wish i had your crystal ball..... if i had to guess 150 may not be out of the question just because the seat of my pants tells me so.. the markets can remain irrational alot longer than any of us can remain solvent. while everyone of your arguments i have to agree with as far as why it should drop everything i learned over the last 20 years has taught me nothing plays out the way you think....... just the mere fact treasury bills beat the s&p 500 over the last decade teaches us that.

there is always something cropping up on the radar that wasnt even a blip before that alters the course of how things turn out

 

[tryan]

Glad I gave up my futures account ... I'ld be betting on lower prices. But I'ld also be broke have placed bets at : 130, 125, 120 ...

 

[HFWR]

That you, newguy?

 

[Zathras]

If you had not put the word 'Never' in the subject I could agree with you.
Since you did though, I would question a few of your points.

#2, do you think the dollar will never weaken again? If so, that would support your supposition that oil will never hit $135.
Same with 4,6,9,10,17 and 19.
If you had said oil won't reach $135 this summer for these reasons I would agree completely with you.

 

[Zathras]

Oh, and #1 was the same reason oil would never hit $100

 

[Marquette]

You posted this on the 29th so I'm confused about #4.