Oil Prices (Again)

Love it.  Doom and gloom is almost always wrong. 

Maybe you should start a poll on how far it will fall!  :D
 
My post in August>>>Contrived?? Don't know about that, but many big oil companies are enjoying huge profit margins because they are gaming the system.
Sure it's free enterprise at its best, and so long as everyone loves it, I'd do what I'm doing: : :Own lots and lots of oil, however, be prepared to sell lots and lots of oil one day in the future. >>>

So far that is what I've done.  Held lots of oil til about 10 days ago.
Not holding much now.  And yes, I still believe many in the industry were gaming the system.  :eek:
 
Apocalypse . . .um . . .SOON said:
Ahhhh, but we're never wrong in the long run :D:
Click to expand...

I think the oil supply may eventually decrease on a permanent basis globally. I think we'll also see demand decrease when high prices encourage substitution of goods. I'm neutral on oil. Not overweighting it, not underweighting it. Just staying invested in whatever my index funds own. I think energy is around 10% or so.
 
And don't forget this article from Aug 31:

Experts: $4 a gallon gas coming soon
Pricing analysts say consumers can expect even higher prices at the pump.
August 31, 2005: 12:37 PM EDT
By Grace Wong, CNN/Money staff writer

NEW YORK (CNN/Money) - Consumers can expect retail gas prices to rise to $4 a gallon soon but whether they stay there depends on the long-term damage to oil facilities from Hurricane Katrina, oil and gas analysts said Wednesday.
"There's no question gas will hit $4 a gallon," Ben Brockwell, director of pricing at the Oil Price Information Service, said. "The question is how high will it go and how long will it last?"

OPIS tracks wholesale and retail oil prices and provides pricing information for AAA's daily reports on fuel prices.
Brockwell said with gasoline prices now exceeding $3 a gallon before even reaching the wholesale level, it "doesn't take a genius" to expect retail prices to hit $4 a gallon soon.
 
I wouldn't get too smug just yet. Pretty much all energy prices went straight up today based on the Midwest cold snap that is headed due east. The front month contract for natural gas went up almost 8% today! :eek:
 
Wouldn't it be funny if we start seeing pundits predicting $10/barrel oil and $1/gal gas? Might happen if the oil starts dropping in price.
 
True, oil dropped but it still around $55 a barrel...far cry from $35-$40.  Cold winter & natty gas will stay high if not higher.
 
Anyone still have canned gas left over? I guess I need to pour that 5 Gallon can of $3 gas in the tank now, but somehow it seems cheaper to go to the pump :confused: .
 
Whew, looks like I didn't pretend to be a soothsayer that time...

[me=Marshac]watches the dow and nervously remembers his eoy prediction....[/me]
 
 
I tend to put my money where my mouth is. I have made huge capital gains in oil and gas over the past 2.5-3 years. Whatever is in tax-deferred accounts I have sold- not because I know it is going down, but because I am not so sure it is going up right now.(Oil, not gas) I have natural gas royalty trusts and partnerships that I will never sell- the basis is almost 0, and they are in taxable accounts. I also have a  driller with big gains that I would like to hold off on realizing at least until 2006. I am a little nervous on this one

IMO, crude and natural gas is a play with many acts, and it is a long way from being over yet. It may never be over, until we manage atomic fusion.

Ha
 
Just a good chance to load up on more oil I think. Cheers!
 
Grantham's (whom I respect) views on energy:

"'Over the years,' he explains, 'we have asked over 2000 investment professionals [if they knew of] an exception to our claim that every asset class move of 2 sigma away from trend had broken [back down to trend].'

Unfortunately, Grantham confesses, 'not one of the 2000 ever offered an exception! ... But we have always said that intellectually, you could imagine a paradigm shift in an asset class price, even if we have been unable to document one yet in history.'

He believes crude oil is capable of resisting the powerful forces of mean-reversion. 'It's the best possibility I've seen in my career,' he says. 'But the investment desert is littered with the bones of those who bet on new paradigms."

http://www.investmentu.com/IUEL/2005/20050512.html
 
wildcat said:
Grantham's (whom I respect) views on energy:

"'Over the years,' he explains, 'we have asked over 2000 investment professionals [if they knew of] an exception to our claim that every asset class move of 2 sigma away from trend had broken [back down to trend].'

Unfortunately, Grantham confesses, 'not one of the 2000 ever offered an exception! ... But we have always said that intellectually, you could imagine a paradigm shift in an asset class price, even if we have been unable to document one yet in history.'

He believes crude oil is capable of resisting the powerful forces of mean-reversion. 'It's the best possibility I've seen in my career,' he says. 'But the investment desert is littered with the bones of those who bet on new paradigms."

http://www.investmentu.com/IUEL/2005/20050512.html
Click to expand...

That's a good read, but I only partly agree.  I do think oil is the rare paradigm shift, and I do think he has housing nailed.  However, no way can I buy the thought that the S&P 500 is a bubble, nor do I think the market is 30 to 40 % overvalued.  Not now, sometime maybe, but not now.  :-\
 
wildcat said:
Grantham's (whom I respect) views on energy:

"'Over the years,' he explains, 'we have asked over 2000 investment professionals [if they knew of] an exception to our claim that every asset class move of 2 sigma away from trend had broken [back down to trend].'

Unfortunately, Grantham confesses, 'not one of the 2000 ever offered an exception! ... But we have always said that intellectually, you could imagine a paradigm shift in an asset class price, even if we have been unable to document one yet in history.'

He believes crude oil is capable of resisting the powerful forces of mean-reversion. 'It's the best possibility I've seen in my career,' he says. 'But the investment desert is littered with the bones of those who bet on new paradigms."

http://www.investmentu.com/IUEL/2005/20050512.html
Click to expand...

My bet is that the paraigm shift has already occured: Billions of new users in Asia with money and a desire for vehicles. About three-four years ago China consumed one barrel of oil/person/year. Now it's close to two :eek:.
 
wildcat said:
I knew I would win over Greg with that post ;)
Click to expand...

Normally, I like to stay inside the paradigm of "wiseas*"--emphasis on the second syllable.
 
Spanky said:
Hmmm. Price is climbing up to almost $60 ..stay tuned
Click to expand...

And check out natural gas: knocking on the door of $14 again...
 
Spanky said:
Hmmm. Price is climbing up to almost $60 ..stay tuned
Click to expand...

I think Calpine hit about $60 when the US was desperately short of electricity. :LOL:

I remember reading at the time that was a paradigm shift too because every electron over the Internet needed to be produced by a power plant. :LOL:
 
. . . Yrs to Go said:
We've seen the show before. We know how it ends. Lower prices arrive precisely at the moment when everyone becomes convinced that "this time is different".

And yes, I've heard how China is taking over the world.
Click to expand...

The DOE predicts worldwide "peak oil" in 202X.
 
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