56 thoughts on “Crude oil: Up, up, and away?

  1. En roumanie se venduu tres bien oil brent pour des firmes 'LUKOIL'
    PETROM,etOMV',verifier cette market de venduu-achete

  2. Oil is topping, in near term, from technical perspective. The next move is down.

  3. Winston, you may be right about that -- gotta get out more. Closed nearly all my trades over the last three days so I can do just that.
    No fun if you're worrying about losing money when you go out to enjoy!

    But for me, enjoyment is playing in my physics lab with my pals....
    Dunno if Adam will allow a link to my toybox, but I'll try here.

    I know my way around energy....all sorts.

    BTW, just remeasured that truck, and it's 17.2 mpg with a 6 cyl. Something must be wrong with it -- it's new to me so I'll have that checked, that's just gross.

    Think about this guys -- if that Camaro had 1/4 the size engine and weighed a bit less -- you'd have plenty power still for a normal car, a hot rod, and it would get better mileage than most super-hybrids....all at once. That's kind of what I proved with the kart project -- it's not so much the engine tech (in that case it's a simple but good high compression motorcycle engine, tiny), it's how hard it is to more the car around.

  4. Sounds like a bunch of Lemmings to me. The U.S. has more Oil in Colorado than all of Saudi Arabia ! Yes it's in shale and has a higher cost of production but it's not prohibitive by any means. There are lots of conflicting interests that none of us here can control. We can immediately decrease fuel consumption on every car on the road 20 % by simply adding another gear or two to the transmission or adding a simple 2 quart Hydrogen generator to the family mini van. I've done both and it works every time. There are also technologies out there that have been available for years that will get 70-80 mpg from a v8, those are not urban myth they are fact.The point is that we do not have a real shortage of oil and will not have one for many years into the future. If and when we have a real shortage of oil the price will force people to use other viable options that will take over when companies can make a better profit or it makes political sense to do so. At any rate I'll just follow the trends and make money either way.

  5. Currently one should be long...whether it touches all time high..is adifferent issue...
    But currently this asset class is worth buying...

  6. The economy's been hurt bad. For the near term, it's in the best interest of economic recovery for the price of oil to stay in check and thereby help keep corporate operating costs (production, transportation, shipping, etc.,) down. Rising oil prices contributing to inflation won't help. Hopefully, the powers that be will act accordingly to keep the wheels rolling.

  7. I don't see crude moving more further than 87 till this week... It will come down to 82 range again and go even further to 90's level

  8. I haven't read any posts about Nissan's $25,000 electric vehicle. Would likely catch on as secondary vehicle or for small mileage applications. There would be your demand displacement rather than new demand from emerging.

  9. I think its not going higher, as to buy gas, oil or anything it take money, that come by higher paying job or booming business. Look at how many people have lost jobs. Think very basic. It is another bubble in process. Be AWARE.

  10. I'm wondering, is it morally astute to invest in a commodity that is primarily owned by our enemies? Plus the more you invest in OIL the higher the prices will be driven at the pump. Perhaps a better moral investment would be in to lithium where it is the primary commodity used in manufacturing batteries for green cars. I'm certainly not the "moral police" but I believe as good stewards of our national sovereighty we should not help fill the pockets of Arab shieks who in turn give millions of $$$ to Al Queda and the Taliban. Think about it. Are we prostituting ourselves as profiteers in oil stock?

  11. I agree with William,NG is much cleaner than gasoline or diesel, is already used for transportation in many countries and is now roughly 5 times cheaper than motor gasoline in the USA on a $/BTU basis. The problem is one of leadership; who will start the required infrastructure investments to enable mass adoption? If our political leadership had any brains they would have mandated all government vehicles to switch to NG ASAP paving the way for private adoption instead of mandating higher taxes, higher federal deficits, questionable(Corrupt) Wall Street bailouts and questionable mandatory healthcare on us. It is up to us to vote the bums out of office and elect better and smarter representation at all levels of govt. to lead us out of this mess.

  12. Buy Ng it will be the next fuel to be used by vehicles. Take a look at westport innovations. This stock five years ago was a penny stock. Presently at 17.00 and chg.

  13. Lot of astute comments above. The geo-political terrain is like a mine field, with no way of knowing what will drive the price near term, but
    the price is already high enough to push prices up on everything transported to our localities. When oil was $100-140 there was no shortages at our pumps- the paper price, and the actual wellhead price
    are different.
    As for the long term, say 5 years- don't forget what condition the debtor nations (US,UK,EU,JA) could be in as this currency ponzi scheme unfolds. The outcomes will be more significant than just inflation.

  14. I'm with John E. I'll trade energy up or down. But if anyones got a program for this complex I'll pay good money!

  15. The price of Oil is related to monetary inflation as well as the supply and demand
    related to production and consumption.
    Longer Term -- US inflation will push up the price of oil & gold.
    ''Anybody's Guest Term'' -- a war between Israel, the US and Iran, Russia or China
    will blow the top off oil & gold prices.
    If the world economy goes back to full steam ahead, the demand for energy
    will push prices higher.
    But right now, the day-traders are having fun pushing the price up & down
    within its channel.
    Stay tuned sports fans & keep those Maple Leafs stored under your mattress 😉

  16. Certainly interesting commentary. FWIW I own 4 cars, a tractor, and a sorta street legal go kart. The Kart is 200mpg, a death trap, and fun for around here. I drive maybe total 5k miles a year -- I trade full time and all I go out for is shopping and entertainment.

    2010 Camaro SS 20.5 mpg driving it like it was meant to be driven (idiotically, but fun to have 422 hp on tap)
    2007 Honda Ridgeline -- 19 mpg driving like an old man (I am).
    2003 Buick -- 25.5 mpg day in and day out no matter who drives it.
    Dodge 15 passenger van -- 13 mpg on good days. In other words, 4 times the gas mileage of the Winnebago it replaces.

    Yeah, I should sell a couple of them. Being a retired electrical/software systems engineer, the problem with the hybrids is going to be those batteries going bad too quick -- having been off the grid (solar) I know batteries better than most...batteries are the dog of the power world, and unless someone adds new entries to the periodic table, it's not going to get a lot better. And the low weight IS dangerous out there -- my Kart would kill you in a collision with a dog.

    I burn more gas in the lawnmowers (50 acres) and backup generators for my solar system.
    I make more trading oil (usually stocks) than I pay at the pumps. Go figure.

    CS Lewis wrote a long time ago about the weird fascination our species has with moving heavy things long distances quickly -- around WWII IIRC. Give up that fetish and it all looks a whole lot better...IMO, one of the better uses of gasoline is tending my woodlot with a chainsaw, where I get huge net energy gain. Save it for stuff where the energy density and portability truly make all the difference.

    When all the Chinese figure out how to telecommute, as I started doing in the '80s, they will be parking the bikes and the cars both...it's better.
    Improved automation will drastically reduce the need for commuting which is the big one after air conditioning/heating/refrigeration in wasting energy.

    But since human nature is what it is, for now, yeah, oil will go up until it goes back down because those who sell it have figured out that getting too much for it means they don't get as much -- those fiat dollars and the rest of the world's economy can only make them so rich. They know, and have even mentioned this publicly in the past.

    But if you haven't figured out the whole trading game is about human nature, then this is the most important sentence on this board.

    1. Gosh, Doug Coulter, you may need to get away from the computer and get out amongst people for some conversation a bit more. 🙂

  17. supple and demand, more countries using more and more of the stuff and less and less of it being produced in 3-5 years it will be much higher its only the question how hi and how soon.

  18. Be very careful with your investment limits into "oil" as it is a very geopolitical commodity and can change in a moment. With Obama allowing Russia drilling permits in the Gulf of Mexico and off the eastern seaboard this could rock your world....negatively.

  19. generaly speaking commodities are inflation sponges, Oil will go up for an "exeptionaly long" period... as long as the FED keeps interest rates "exceptionaly low". And a good indication of nearing hard times is when we see oil back above or arround 100$ again... Then we will switch to an " exeptionaly high" interest rate period in the economy wich will eventualy lead to "exeptionaly slow" growth... The japanese tried the same recipe in the 90s and still have not been able to withdraw stimulus from their weird economy. If oil is going up is because inflation is going up. One thing that makes a difference is the 10 year yield, above 4% means that someone is telegraphing the FED that they are about to run out of time and they are being "exeptionaly over extended"

  20. All I can say is that I'm glad I got solar panels last year! Now if I can just get an electric car that's not over $100K and can go farther than 100 miles...


  22. This move had"floor traders" written all over it. Tanker rates are down 35% due to the glut... tankers sit idle due to the glut... the demand for oil just isn't there.

  23. Energy (crude & gasoline) is in a period of seasonal strength until early-mid May. Energy stocks have recently recorded buy signals. A profitable trade to enjoy while one grumbles as they fill their tank at the pump.

  24. Hector - actually when 60% agree with something - go with it. When > 85% agree, fade it.

  25. In the short term I think crude will go up because its driving season but I don't think it will go up that much considering alot of people are without jobs so holidays are going to be close to home. Unless things heat up in the middle east and/or China and India start to import more commodities, it will probably trade side ways till 2012.

  26. Peak Oil isn't about running out of oil, it's about running out of *cheap* oil. Modern economies rely on perpetual growth, which in turn relies on abundant cheap oil. If oil goes above $100/bbl, things come crashing down. Oil from coal is possible, but it's not cheap, and the energy returned on energy invested is not much better than 1:1. When it gets to the point that it takes 1 barrel of oil to produce 1 barrel of oil, the game is over.

  27. If oil goes over $100.00 per bbl, we will have the second dip of recession. Then the price will retreat.
    Very little oil is used for electric power production. It is almost all used for transportation and a small amount for heating on the east coast. Coal and natural gas are the most used fuel for electric generation, nuclear a distant third, and wind, solar, etc. far behind.
    We are already seeing conversion to methane for buses and local fleet vehicles. Fueling station sparsity and on-vehicle storage limitations are hindering its use on general transportation, your car and mine. But with equivalent natural gas at about half the price of gasoline, it is bound to grow. T. Boone is betting on it and he is a good gambler. Ford & GM are finally starting to build cars for methane fuel or finishing by a third party. Right now it costs about $3k to convert to methane but if the manufacturers start designing cars and trucks for methane, the price will come down. At $1.50/ equivalent gallon of gasoline, it is very attractive.

  28. I am bullish in the medium long run (5-10 years), but anything can happen in the short run depending on when the governments of the world cut back on stimulus.

  29. All right Hector! Does that mean this board is officially of small, neophyte investors?

  30. With all this talk of finite crude and plentiful supplies of natural gas, might we find NG taking its place with hybrid powered cars? And for that matter, used to fuel power plants?

    1. 50% of US electricity is from coal powered plants. 20% is from natgas fired plants. CNG (compressed natural gas) fueled cars are here and there are filling stations that supply CNG in many cities.

  31. I was curious about the vote results on your oil survey, 63% of the traders are bullish on oil, that means just one thing that the only direction for oil to go is down.

  32. Oil will hit 92$ and then go back to 50$.

    Curtis is no oil producer; he is merely one of those future oil contracts buyer. He will talk about suni, shia and whatever nonsense he can.

    1. I am a small producer. 600 barrels per month.
      and only fools and crooks play with the futures.
      the fools play to give their money to the crooks.
      Your ignorance of the Sunni Shia conflict is typical.
      It's the driving force behind geo political events
      in the middle east.
      $50.00 oil? Wow. and Snickers will be a nickel again too.
      I hope you drive a Hummer.
      Bring me your money. lol

  33. Regards "peak oil", why don't people factor in other fossil fuels. The supply of coal (converted into gasoline like in South Africa) and natural gas is HUGE. Probably a century or more before peak fossil fuels.

  34. Medium term it might go down after boucing off of 50% ret. but long term it will continue to go up. Multi year trend is up, demand is growing and supply is shrinking. There's no reason for oil to be cheap.

  35. World supply is constrained; major existing producing fields like Ghawar, Anwar, North Sea and Cantarell are in serious decline. There are some interesting new alternatives like Brazil offshore pre-salt and Athabasca oil sands in Canada, but they are very difficult areas that will take a long time and huge investment to come on-stream. On the demand side the developed countries will probably be flat, but the developing countries (Asia, Africa, Latin America) are increasing demand rapidly and will add considerable new consumption in the next decade. Add potential geopolitical turmoil in the Middle East, Nigeria and Venezuela and you have the ingredients to take crude oil prices much higher than anyone can now imagine.

  36. Good stuff Curtis.
    Most of us N. Americans have a pretty sheltered view of our world. As Curtis states, there are forces at work that are quite unpronounced to us. If his comment is correct, what we wouldn't consider (religious aspect) a part of the mix, is common place in that part of the world. It is this intertwining of economic, political and religion that can make for a difficult bed fellow.

  37. Horizontal drilling with multistage fracturing has brought the natural gas price down but even with this same technology in use crude prices have not come down. This technology has pushed N. Dakota to no.4 in US production ahead of Louisiana and Oklahoma (Bakken formation oil). But this cannot keep up with losses from aging fields elsewhere.

    Demand is growing too. When someone buys a new car in the US, they retire a less efficient vehicle (SUVs, Hummers, older cars). When someone in China buys a new car, they park a bicycle. And China has now passed the US in vehicle sales (not all cars, lots of trucks too). Basically all new demand. Same in India.

    I haven't a clue where oil is going this summer but longer term the wind is at the backs of the bulls for sure. If I had to bet I would go with that longer term trend, but keep a sharp eye on it (and stops).

    1. You are so right MM. Young traders seem to think this is expansion. We'll never be able to keep up if the economy expands. The good old days are gone. Got renewables?

  38. I feel that new technological advancements in fuel alternatives and the recessionary situation will place lower demand for crude oil. We have over leveraged in all aspects of business. It is time to clean up the unecessaries and become more effecient.

    1. This line of thinking is analogous to "If we had some bacon we could make bacon and eggs, if we had some eggs."

  39. I'm an oil and gas producer. Oil isn't really going up as much as it appears. It's just that the rest of the world is saying that if we insist on paying with our fiat dollars that they want a lot more of them this year than they did last year. OPEC would switch to the Euro (as Iran has now) for trading oil, but Saddam Hussein did that about 15 years ago and Bush went in and kicked his ass for it and took the country away from him (after the US had given it to him in the first place).

    Google "Peak Oil" and even a 5th grader can see the supply curve is about to head down rapidly. There is every reason in the world for oil to go up and none to go down. Even a major deflation would not make the reserves increase. We're dealing with a commodity that is not renewal and has a finite and dwindling supply.

    I have bought all my children Prius auto's and told them to prepare for $5.00 gas or higher. The fools who keep buying the gas guzzler's and Hummers do so at their own peril. I love it when they do. My monthly check will be so much larger.

    The great war that the industry is anticipating has nothing to do with us and the Russians, or us and the Arabs. It has to do with Arab versus Arab in the battle between the Sunni's (Saudi Royalty) and the Shia's (Iran) and who is going to rule in Mohammeds's line. Slowly but surely the Shia's are encircling Saudi geographically. When they have control, we will be at their mercy as we were in 1979.

    1. Curtis.
      Thank you for the 411. That`s a lot of info in a nutshell. Why, when America has such huge oil and gas reserves are they so underutilized? I used to live in so. Tx. and it was full of capped wells. Thanks.

      1. There just aren't the "reserves" here that you may have been lead to believe. Even if Anwar were opened up, it would have enough energy for America's needs for less than 2 years. The new stuff in Brazil is years away and even then . . won't be ours.

        Look at http://www.peakoil.com and you see that the United States reached it's peak years ago. (Peak being when consumption outpaces discovery. Saudi Arabia will reach peak in this decade. Fortunately for us, we now control the second largest field which is in Iraq. And believe me, Obama or no one is going to let loose of that. When you hear talk of "pull out" or bring the troops home, just think to yourself about the tooth fairy or Santa Claus. We will not exit Iraq. That war was all about getting our hands on 2.5 billion in reserves before Russia or England or France or Iran could.

        As for the capped wells, in South Texas, prices need to be around 70 bucks and people will open those back up. But most of them are marginal and won't make a profit at under 70.

        1. I disagree. Recent finds in N Dakota, Wyoming , Colorado and Utah place our reserves above those of Saudi Arabia at its peak not counting oil shale.

          During the summer I hunted in The NWT in Canada flying over vast untapped sources that are currently bubbling out of the ground.

          Supply of oil is there for future and new supplies need only be tapped along with dramatically increasing dwindling refinement capabilities.

          We just need to collar these ridiculous environmental idiots.

        2. Canada is a mining friendly country, more so than USA, I would think they are also friendly to other resource exploration. So the comment about environmental idiots doesn't make sense. Also, the Bakken discoveries are big, but not nearly so big as Saudi Arabia.

    2. Thank you for your cogent and eye opening post. Could you say more about hoe Iran's Shias are encircling Saudi?

  40. Looking at oil here on this site (a good source), it seems to jump up, then creep back down for awhile, trading in a descending range, then jump down farther, then back up to repeat.
    Cycles not evenly timed, but the shape stands out. Here we are at the beginning of the big driving season...

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