Puts more wind into alternatives. Although the ethanol from corn is dumb.
was “WIND into alternatives?” a intended pun? if so, +1
Naturally, this is about “fundamentals”. A 0.65% change in the dollar obviously equates to a 4.90% jump in oil prices. Let’s not forget those great analyst reports saying oil will hit $150. Self fulfilling prophecy? Gotta love the shakedown. How much money just got sucked out of worldwide consumer’s pockets today? What’s funny is that this is nothing more than a feedback loop. As the ECB raises rates to combat inflation more people will jump into oil to “hedge” (aka, speculate) on further increases in both inflation and oil costs. Thus, more inflation will be fed into the system, making more interest rate changes necessary. This will drive the price of oil up again (people “hedging”), feeding back into inflation. Repeat ad nauseum. Gotta love “efficient” markets.
Well spierece…if what you are saying is true…it cant go on forever!!! It will come crashing down one day… put your money where your mouth is…start building the shorts!
I think I found another feedback loop. Damn, feedback loops are everywhere. Help me with this: You think the oil futures market is a bubble so you short some oil companies. Those same companies are short oil futures (afterall, 99% of oil companies are selling futures like a madman now). Does that mean you are effectively net long some oil futures thus strengthening the feedback loop?
What I’m really loving is $13 NG. What I don’t like is people whining about oil going up because they shorted it at $90 and have thus far been wrong. Don’t fight the tape, son.
virginCFAhooker Wrote: ------------------------------------------------------- > I think I found another feedback loop. Damn, > feedback loops are everywhere. > > Help me with this: You think the oil futures > market is a bubble so you short some oil > companies. Those same companies are short oil > futures (afterall, 99% of oil companies are > selling futures like a madman now). Does that > mean you are effectively net long some oil futures > thus strengthening the feedback loop? So are you implying the oil companies are shorter than you are making you a net long. I just figured if your short, your short, if your long, your long — unless their is another side to the trade that cancels out the short and makes you long. Help me understand?
I have no idea? If you short an entity that is net short a contract that is trading in a bubble… are you effectively net long a bubble contract?
>>What I’m really loving is $13 NG. >>What I don’t like is people whining about oil going up because they shorted it at $90 and have thus far been wrong my guy was in oil then nuclear then oilsands and switched to natural gas last year. We lost about 30% on NG last year but have made it back and then some this year. The theory is that i) something like 1/4 of north american NG is going to be needed to fuel the oil sands which are an energy hog ii) traditionally there’s a link between NG prices and oil prices and the technicals are way out of wack: he’s hoping that NG prices will soar to correct the technicals Drill in ANWAR already
The only reasons I don’t want high oil prices are selfish ones. It costs me more to fill up my tank, so it reduces my cash flow. It’s a net negative to my portfolio as well (short term, anyway). My long exposure to oil is more than offset by my long exposure to US equities, which are taking a beating today in-part because of oil. “Me” aside, I think high oil prices are necessary if alternatives are ever going to be viable. Long-term, we MUST find alternative sources of energy.
spierce Wrote: ------------------------------------------------------- > Naturally, this is about “fundamentals”. A 0.65% > change in the dollar obviously equates to a 4.90% > jump in oil prices. Let’s not forget those great > analyst reports saying oil will hit $150. Ummmm, you must have missed the fact that an Israeli official said today that attacking Iran would be unavoidable if they do not cease their nuke program.
I know little about oil markets and even less about NG - could you talk about some of those fundamentals? Only thing I’ve heard is that NG has about 1/10th the energy of oil, so it should be roughly 1/10th the price.
It is actually more like 6:1. The gas contract is quoted in MMBtu. A barrel of oil has something close to 6 million Btus.
But what about finished products?
I am no chemist, but I don’t think refining the oil would increase the energy content.
Oil up 9.55 on little to no fundamental changes. Yup, “efficient” markets alright.
For those those that think higher prices are a bad thing, didn’t you just want to scream at Morgan Stanley “STFU with your price targets!!!”
Who exactly in here is arguing that commodity markets are textbook efficient?
Just in case you missed my first comment, spierce. This move has precious little to do with Morgan Stanley’s call: http://www.cnn.com/2008/WORLD/meast/06/06/israel.iran/index.html
A $10 move from $40-$50 freaks everybody out but a $10 move from $130 to $140 is another yawner.