[Marklar]

I voted for $55. As I stated in an another thread, I just have a hunch that we will see it lower this year...My question for all who voted for $80+. You were probably the same ones who voted for the highest number in last years poll. Seeing what happened last year AND if you were to actually back up your opinion with real money, would you still vote for $80+. It seems alot here vote for what they think oil SHOULD be priced at.

If SA can keep their major oil fields pumping and continue to make Matt Simmons look like chicken little, I don't see a major supply problem this year. Geopolitics will be driving the oil prices this year. When all is quiet we should see prices decrease, like in the recent weeks.

I want to buy some options, for starters. What online trading brokers do you recommend? I was considering xpresstrade but I would like someone that would let me fund through ACH Checking rather than waiting for a check in the mail. Incase I get that sudden urge

[MicroHydro]

$this->bbcode_second_pass_quote('Marklar', 'M')y question for all who voted for $80+. You were probably the same ones who voted for the highest number in last years poll.

[MrBill]

The market is very choppy, especially in the European time zone. Basically oscillating around the moving averages, so giving off lots of false signals. I have been chopped up pretty good this past couple of sessions. Long, but no follow through, stopped out near the bottom, etc. Not a lot of fun, especially since yesterday unleaded was well supported in the European time zone and then without warning dropped 5-6 cents in the first 30-minutes of the NYMEX session. Ouch.

Brent has been getting no support from the gasoil. Wti has been a mixed bag of tricks with the heating oil steady while the unleaded fell out of bed. Apparently, it really does have something to do with the switch from the unleaded HU contract to the new RBOB contract which uses ethanol as a fuel additive. Great. That one blindsided me.

I have no ideas here. Just range trading. This week's inventory report will come out tomorrow instead of today due to the long weekend and holiday Monday.

Any body got any good jokes? I like this one.
Dilbert & the economics of oil

[MrBill]

Actually, now that I look at it closer, the technicals really are not very supportive overall. My model is about -65% short with some prices holding just above support, which if broken would throw the model even shorter. Perhaps too early to call for a resumption of the downtrend, but clearly, selling on the rally would have been the right strategy yesterday (when the technicals looked much more supportive) and today may be too late. Never the less in order to confirm this we would need to see Brent sub-6090 and WTI lower than 61.75/80 (fill the gap) at least. Heat and unleaded are showing full short positions and hard to imagine a sustained crude rally without their support.


Early predictions for tomorrow are as follows:

Crude f/c up 0.7 mio bbls
Distillates f/c down 1.4 mio bbls
Unleaded f/c up 0.8 mio bbls
Refinery runs f/c down 0.2% to 86.1%

Those numbers are not going to set this market on fire, although Reuters' survey has consistantly under-estimated stocks this past several weeks. Regression to the mean? Look for surprises, if anything to bigger draws than expected, but somehow I doubt it? Not with the way unleaded caved in yesterday.

[Chuck]

$this->bbcode_second_pass_quote('Marklar', '
')
I want to buy some options, for starters. What online trading brokers do you recommend? I was considering xpresstrade but I would like someone that would let me fund through ACH Checking rather than waiting for a check in the mail. Incase I get that sudden urge

[MrBill]

$this->bbcode_second_pass_quote('Chuck', '')$this->bbcode_second_pass_quote('Marklar', '
')
I want to buy some options, for starters. What online trading brokers do you recommend? I was considering xpresstrade but I would like someone that would let me fund through ACH Checking rather than waiting for a check in the mail. Incase I get that sudden urge

[MrBill]

Today is Red Army Day, so I would like to wish my comrades in Moscow a nice day off. I am the least popular person in my office (what's new?) today, as we are expecting an investment bank to do due dilligence and I mixed up my dates, so they are here today instead of tomorrow as originally planned. That means all my colleagues have to work today as well. Oh well, they will get a nice long weekend in exchange, and I did buy them brownies this morning.


Market dropped like the proverbial brick overnight (whatever that means?). Brent touched $5980, WTI $60.45 almost closing the gap left fom the weekend, heating oil to $1.6420 (March) and unleaded down the most $1.4655 (March). However, this morning we have a fairly strong bounce in the Brent and the gasoil, so I do not know if this is just short covering or whether there is a news story behind it?

All I can see is the daily carnage in Iraq - over 40 killed in Baghdad today - but that does not usually move these markets? Mind you with the Mosque bombing this week it looks like Iraq is slipping into a civil war. Iraq has just cancelled all police & army leave and imposed curfews in Baghdad.

This may be unsettling some and causing them to take back shorts just in case. in the big scheme of things though, the breakdown in the technicals points towards a re-test of the $5800 area in the Brent, maybe even sub-$58.00 in the April WTI as on the continuation chart the March WTI low was $57.40 before this last Nigeria induced rally? Too early to tell, so will wait for follow through here in the NY time zone.

[truecougarblue]

I went to bed last night thinking that the market would be down this morning based on the inventory number from yesterday in combination with the holiday in Europe.

Would you all be of the opinion that the bump this morning is exclusively due to the Saudia Arabia bombing, or was I wrong in my original thinking?

[MrBill]

Well, was out of the office today, so missed the firworks here as my e-platform at home is also not updating. Super timing. As we speak WTI is up 3.40% and heating oil is up 3.3% while unleaded is only up 1.76%, so although there are geopolitical concerns enough for a Friday afternoon, the inventory numbers and the switch from HU to RBOB contracts is creating uncertainty and weighing more on the unleaded than the crude or heating oil. Bad for me. Will try to learn more. Cheers.

[cube]

$this->bbcode_second_pass_quote('truecougarblue', '.')..
Would you all be of the opinion that the bump this morning is exclusively due to the Saudia Arabia bombing, or was I wrong in my original thinking?

[MicroHydro]

IMO, near month crude, unleaded, and natural gas were in modestly oversold positions before the Saudi attack. I was approaching buy signals on all of the above.

The credulity that many traders have regarding the US inventory reports amazes me. Nobody actually measures the tank contents, it is all based on easily manipulated statistical models. I would believe US oil and gas inventory numbers as much as I believe that the US reports accurate inflation (actually >8%) and unemployment (actually >12%) numbers . Jim Puplava reported a couple weeks ago that one of the natural gas storage domes was sucked down to the brink of implosion (minimum operating pressure) during the same period that the govt was reporting above normal gas inventory. I suppose that if it collapsed, CNN would say that a sinkhole had opened up as a late effect of the hurricanes. Also the explanation for the Denver blackouts last week (freezing of valves in dry natural gas lines!) is transparently BS as noted by the industry guys at TOD.

As for US gasoline, wait until many refineries are shut for overdue maintenance in March. Despite the very crappy US economy, gasoline consumption is up 1.8% year over year. Population keeps rising, and there is no demand destruction. Unemployed folks still have to drive to the grocery store with the old gas guzzling car they have, they can't afford a new Prius.

[MrBill]

Unleaded recovered at the close on a headline that Colonial would continue to accept MTBE laced gasoline in its pipelines alleviating fears that traders were buying a product with potential physical delivery which then would not be acceptable for commercial purposes. Still, rather think this will help the near month contracts more a spur the shift into the new RBOB contracts farther along the curve.

I have not checked out the ethanol contract on the CME here from home, but would be interested to see how it has traded this last few days as it becomes clear that the US does not have enough ethanol production to meet the new environmental standards and will have to import stocks. Looks like a buy factor for sugar and corn futures if there is a shortage of ethanol.

Long term it should support the price of cattle and farmland. In order to be economical, ethanol has to be produced where they get the highest yields per acre. That will increase demand for marginal farmland for pasture and cattle. Will make feedlot economics less attractive. Good ol' Alberta grass fed beef tastes better in any case.

The implications of taking good farmland out of food production and being put into production of ethanol for fuel is akin to moving back to an agrarian economy and using animal draught power. The efficiency gain was about 25% more farmland for crop production when you no longer had to support large numbers of draught animals.

Now, you are burning calories for fuel that could go into animal feed. This will eventually get recapitalized into the price of farmland. Marginal farmland that is unsuitable for modern corn and soybean production is still suitable for animals, either as hay land, pasture or alternative crops that need less heat units such as barley, oats and canola, so long as there is adequate moisture. I think it is a long-term buy supported by population growth.

Better hold onto that family farm in N.Alberta. Close to large supplies of coal and sources of synthetic oil as well as abundant fresh water. Global warming might also make the land more productive, if it doesn't at the same time result is less precipitation?

[MrBill]

Checked the CME/CRBI. Corn up 2%, ethanol flat, live cattle down 0.5%. Just curious to keep those relationships in focus going forward. Have a nice weekend. Cheers.

[MicroHydro]

Well, it has always annoyed me that all of the energy commodities are easily tradable except the one with the most bullish outlook. So I gave in to the virtual world of ETFs and bought electronic uranium bullion. The ETF is called Uranium Participation Corporation symbol U on the Toronto Stock Exchange (TSX). There are 20 million shares outstanding for a market cap of CN$140 million and at least 85% invested in yellowcake by design. Basically, the equity rather closely tracks spot uranium. I am more comfortable with this than Cameco, ERA, etc which have nosebleed P/E rations and have short sold their future production for lousy prices like $16/lb. The only bad thing is that you can't take delivery.

http://www.uraniumparticipation.com/

[rogerhb]

$this->bbcode_second_pass_quote('MicroHydro', 'T')he only bad thing is that you can't take delivery.

[MrBill]

Maybe that is why central banks are selling their physical gold bullion? To make room for enriched uranium that will be worth more? ; - )


I need some good graphs at home for a presentation. Does anyone know of any good sites for making graphs of commodities, etc.? Should be quite clean, so they can be put into a power point presentation for example?

Unfortunately, my Reuters3000 is not networked so I cannot easily export them to file. When I try to load them directly into PP they never scale correctly. Easiest to insert an image into PP once it is saved. Presentations are always a good time waster due to formatting.

[drew]

$this->bbcode_second_pass_quote('MicroHydro', 'W')ell, it has always annoyed me that all of the energy commodities are easily tradable except the one with the most bullish outlook. So I gave in to the virtual world of ETFs and bought electronic uranium bullion. The ETF is called Uranium Participation Corporation symbol U on the Toronto Stock Exchange (TSX). There are 20 million shares outstanding for a market cap of CN$140 million and at least 85% invested in yellowcake by design. Basically, the equity rather closely tracks spot uranium. I am more comfortable with this than Cameco, ERA, etc which have nosebleed P/E rations and have short sold their future production for lousy prices like $16/lb. The only bad thing is that you can't take delivery.

http://www.uraniumparticipation.com/

[drew]

Try this link MrBill, it seems to be a whole plethora of freebies that users have posted.

[url=http://]http://stockcharts.com/def/servlet/Favorites.CServlet?obj=public&cmd=show&disp=RED&n=/[/url]

my bad; cut and paste, cant get the link to behave

Drew

[MrBill]

Thanks Drew. Will take a look at those links. This is a short week for me. Couple days in the office then off to Cairo for four days. Many might be thrilled to see the pyramids or the national museum, mostly I am thinking about beiing out of the office again. Seems like this year a day here or a day there makes a difference? That in itself is a warning signal. The difference between supply & demand is so tight that every event seems to have a 3-4% effect on the price. That is not normal. It should give us a warning. If anything goes wrong in this year, we will be much higher. A really uneasy situation for everyone.

By the way, a Persian guy named Guy just delivered me a pizza. I enjoy it while I can. Post peak oil his scooter will be far too expensive to run. In any case, his friend just paid the mafia $12.000 to take him to Canada. Once in Canada he will claim refugee status and receive government support and an apartment. He is quite keen on it. Strikes me as odd that Canada sets itself up as such an obvious mark?

[MrBill]

So we start the week on a weak note. Seems the market over reacted to events on Friday, but is now focussing on a successful outcome to Iranian talks over their nuclear ambitions and the Saud's putting down the terrorist attack in their Kingdom. I guess all is right in the world now, so no need to price in a risk premium with burgeoning stocks of refined products? From the jungles of Equador to the beaches of the Nigerian delta nothing but sunshine today.

Gapped lower in the Brent from opening levels and we have seen some follow through selling this morning in the crude. Products seem to be leading the way. Support evaporating, but not a stampede for the exits, just drifting off as the market is left scratching their heads as to what to do next? That is the problem with headline driven markets. Once the world does not blow-up then its back to plain ol' boring fundamentals. Kinda like the end of a James Bond film? All that action and tension, the climax and then the denouement until the next emergency pops up.

Iraq lifts its curfew after a week of violence. There has been several explosions in Iran this morning. No further details immediately available. Meanwhile, closer to your home, not mine, France and Spain are doing their utmost best to protect their national energy champions from hostile European take-over bids. Endesa and Enel must not fall into the hands of a competitor. So much for a borderless Europe. Quite the opposite, Gaz de France and Suez to merge. You can never have too little competition in France or too large a national champion it seems? We believe in competition in principle, so long as we can guarantee our local hero is the last man standing.

Hmm, some suport coming in here, so it seems that there is a cause and effect relationship. The more I talk about unrelated topics the stronger crude gets? Maybe you can make money off this causality? I can't, so better stop for now. Good luck and have a good week ahead.