The oil markets are the most heavily manipulated in the world. There is no sense in today’s move higher, with growth prospects being written down system wide. Yet, here we are.
I cannot fathom who is paying this price for oil, especially given how much of it we have being produced, and how diminished the prospects are for using it. So why the buying?
Is it an attempt by a group of market participants laden with oil exposure to protect their portfolio going into year end?
Is it Iran jitters?
Is it a temporary phenomenon from storage?
Perhaps the U.S. is loading up the Strategic Petroleum Reserve, at any price?
Or is the economy actually rebounding, and we just haven’t seen the effects of it yet?
Perhaps it’s a combination of all the above. But what I do know is that the sort of fast, hard moves higher we’re seeing are not natural in a “normal” market. It’s the sort of behavior that comes from either extremely low volume, coordinated purchases, or extreme changes/miscalculations becoming perceptive.
But I cannot, in good faith, cover UCO right now. If the oil market is mispricing what the rest of the market is reflecting, then when it corrects, it will correct abruptly, without warning, and in extreme magnitude. And it could happen any time.
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there is only one reason why oil is higher and refuses to EVER go down… I am short .. I apologize
One reason oil might be up – If Israel got the green light to attack Iran…
That’s my bet..
Is oil going up or is currency going down? Where would you rather have your wealth?
Oil is money in a crisis, like gold.
QED, the printers are upon the horizon.
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Yeah, exactly like metals, except that it’s a liquid, you have to rent expensive facilities to store it, you can’t purchase any in increments less than $100,000, and if demand dries up you need to figure out what to do with it.
And I just don’t see how the euro weakening is going to make oil more expensive. The dollar, yes. The euro, no.
You can simply own a contract for future delivery.
It’s the most liquid commodity out there aside from the dollar.
What would ye buy if you didn’t trust the dollar?
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There’s not a lot, but buying up a commodity priced almost exclusively in dollars when the dollar’s biggest competitor is getting crushed seems…unwise.
A fat lady that sings
That rally in oil was fucking bonkers
Cain,
From the cycle theory perspective: Oil is early in an Intermediate cycle and with commodities at a 2.5 year low, it should run awhile. Probably 3 to 6 months.
It’s all in vain reasons after reasons, articles after articles,the question is making money or losing money and that is the main issue. I short Oil but stop loss @ 6% but who cares?
What are the data telling me? US stocks stubbornly zooming up? Oil stubbornly high? Copper down? Gold strong, but silver struggling? What I see is a mild US recovery (2.5-3%) first half of 2012 but with some inflation worries, China slowing but still quite positive, and Europe a bit worse, but not a disaster.
i.e., US decoupling. I may not like it, but it’s what I see this morning. If I’m right we’ll see strength in US based manufacturing and sales.
I read caution in shorting anything US here, including oil.
China slowing down but still positive? If they have GDP of 5% and inflation at 6% what does that tell you? Tells me the GDP numbers are complete trash.
What I see is Europe completely fucked. The BRIC’s all have inverted yield curves.(AKA they are fucked) Japan is on a fucking money printing cocaine binge(AKA they are fucked) The US may not be quite as fucked as everyone else, but if your looking for 2.5-3% GDP you sir ARE FUCKED.
I will also say AAPL is fucked.
Perhaps you are right, but as of right now that’s not what the data are telling me. The data says we avoid a recession.
For the record, I expect the Dow to trade below 10500, but I would still not be short here. IMO it isn’t a high probability trade.
http://video.cnbc.com/gallery/?video=3000055854
Your telling me…Your data is better then the ECRI data?
Again, related to peak oil, you must include these concepts into your analysis. Read This Article :
Heading down to Washpeak oilington to speak at the Association for Peak Oil-USA‘s Truth in Energy conference on Nov. 2, I sense a general malaise within the peak oil movement.
The pequists, as they have become known, appear to be on the defensive these days as they once again roll back their dating of the dreaded supply peak, confounded by the oil industry’s never ending ability to develop new extraction technologies and discover new sources of supply.
While conventional production may have peaked long ago in the lower 48 U.S. states as predicted by the father of the peak oil movement, geophysicist M. King Hubbert, new sources of supply have been found in Alaska and under the Gulf of Mexico.
And now oil sand production from Alberta and oil from the Bakken shale deposits may soon replace conventional oil in the mix of North American fuel.
Our definition of oil has changed so much the U.S. Energy Information Administration does not even refer to oil any more but rather energy liquids. This includes energy sources we would not have previously called oil such as natural gas liquids, liquefied refinery gases, and even corn-based ethanol.
But peak oil as it turns out isn’t about supply but rather demand. It is a concept rooted more in economics than geology. It doesn’t matter if there are billions of barrels of oil waiting to be tapped from oil sands or oil shales if the prices to extract them are beyond our economies’ capacity to pay.
The peak in our oil consumption will be determined by our ability to pay ever rising prices for the fuel, not by the ability of those same prices to drive new sources of supply.
The energy industry’s task is not simply to find new fuel sources but to find new supplies of oil our economies can afford to burn. While the energy industry has an impressive record on the first count, it has a much less impressive track record on the second.
It has taken successively higher prices to get that extra barrel of oil out of the ground. The price of Brent oil, the benchmark used for most of the oil traded on world markets today, has traded in triple digit range since the beginning of this year.
Maybe that is why the world economy seems to be teetering on the brink of another recession. But if our economies will no longer be growing, neither will oil production.
Some people might call that an oil peak. Others might say we are simply running out of the oil we can afford to burn.
I don’t need to factor those things into my thesis because my thesis has real demand dropping off considerably.
Peak oil is a limit equation; I’m hanging out in the second iteration.
HEY CAIN…LOOKS LIKE JIM CRAMER AGREES WITH YOU ABOUT OIL
http://www.businessinsider.com/jim-cramer-reasons-why-markets-crazier-than-ive-ever-seen-2011-11
For the moment he was very anti-oil selloff not too long ago
CORN !! Not just Oil…like Gold but it’s over priced “So XMART MONEY not selling, !
somethings going on and someone knows more than Me or You !
hard assets??..either a better short now or it’s saying ..telling me we have a christmas rally around the corner !!
some deal , as temorary as it may be , will lift the markets 13,200
X-SMART AS IN USED TO BE SMART BUT GOT DIVORCED FROM SMART RIGHT?
SMART OR X-SMART ?
The upcoming oil worker strike in Brazil will increase the price of OIL.