[MrBill]

$this->bbcode_second_pass_quote('drew', 'H')ey Mr Bill, you could always put some gold in that portfolio....

of course, it seems not to care about the sentiments to which you referred..

(I noticed that too, yesterday...and it was nice to see my gold carry the weight for my oils, which were kinda flat)


Drew

[MrBill]

Yesterday DOE numbers were as bearish as last week's numbers were bullish. Still the market has given up a lot of its gains from its highs with relative little in the way of hard news other than the bad kind out of the ME.

Crude +0.2K to 335.5 mio vs 3 yr ave 299 mio bbls
Distillates +1.2 mio to 131.1 mio vs 3 yr ave 117 mio bbls
Gasoline +1.5 mio to 214.2 mio vs 3 yr ave 209 mio bbls
Refinery Runs +2.4% to 92.9% vs 92.8% YOY

MPTS up to 10.7 mbpd
Product MPTS down 211K to 3.44 mbpd

Gasoline DMD +1.9% to 9.6 mbpd
Distillate (diesel) DMD +4.8% to 4.14 mbpd
(continued increase in transport fuel demand on the back of an expanding economy and lack of viable alternatives)
TTL DMD -1.7% to 20.69 mbpd
(reduction in stationary fuel demand from manufacturing as it switches to natural gas, coal, hydro-electric, etc. in response to higher fuel prices)

With events in the ME continuing to add uncertainty surrounding Iran and its support of Syria and Hizbollah I cannot be complacent about seemingly higher inventories in the USA. Especially as we have seen Chinese demand is up 16% YOY as their economy has expanded 11.3% in H1'06. Given a rapid growth in China and their relative fuel inefficiencies (4X OECD average fuel inputs to manufacturing output) this will push global demand upwards despite higher prices.

Also, refining margins are supportive for the crude. Unleaded gasoline margins are $19.50 and total crack margins between $15.50/16.50, so very healthy.

As well the lower US dollar should be supportive after Bernanke comments that although inflation is high, a cooling US economy should curb price pressures. This lead markets to speculate that after August's Fed hike to 5.5% that they may pause and let events catch-up to earlier tightening while they reassess. In my mind, now is not the time to take the foot off the brake, so long as external prices pressures for credit, energy and bases metals remain firm. Better to stay ahead of the curve and then ease if they overshoot and data begins to support a slowdown scenario. Some extra belt tightening would also encourage more domestic saving in the USA and help address the US external current account deficit. Not a bad thing given high oil prices in any case.

Not much to add here. Just try to go with the momentum in this headline driven market while trying to hold onto wins when direction suddenly changes. Mine is not to ask but why, mine is to buy or sell or die.

[MrBill]

Having trouble to post this afternoon, so thought I would try this thread and see if it works? Here are some supply & demand numbers out of China.

$this->bbcode_second_pass_quote('', '"')BEIJING, July 20 (Xinhua) -- China produced 91.664 million tons of crude oil in the first 6 months of the year, a rise of 2.1 percent on the corresponding period last year, said sources with the China Petroleum and Chemical Industry Association (CPCIA) Thursday.

Output of refined oil products was 84.822 million tons, up 5.6 percent year on year, the CPCIA told Xinhua.

According to the statistics of the General Administration of Customs, China's net imports of crude oil was 70.33 million tons in the first six months, up 17.6 percent year on year and that of refined oil products, 12.03 million tons with a growth of 48.3 percent.

The apparent consumption of crude oil, representing the sum of net imports and output, is 161.994 million tons, 8.2 percent up on the same period last year, and that of refined oil products, 96.852 million tons, up 19.2 percent.

Both the output and apparent consumption of crude oil and refined oil products hit a record high in the first six months."

[Chaparral]

Anyone think gold should take a steep fall this week? I'm waiting to short but this ground war seems to be complicating things. If I do short, I will be only playing with one or two contracts at a time. Last week I played around in both directions but took profits very timidly after only 5 or 6 dollar moves.

Corn seems like it might be good for another 10 cent drop and Chicago white wheat seems like a good bet to short as well. Took profit last Wed at 4090 and it went right back up to 4260.

Still long on CL and HU. The only way I'll short those is if they hit 7900 or 23500 again. There are too many geopolitical, meterological and refinery maintanence gremlins out there.

[MrBill]

The latest from Goldman Sachs
$this->bbcode_second_pass_quote('', 'E')nergy Weekly
Commodities
Reduced savings cannot continue to accommodate stronger US oil demand

Oil prices declined as concerns over a broader Mid-East conflict eased

Oil prices sold off sharply this week as concerns over Iran and Syria entering the Israel-Lebanon conflict have eased, at least temporarily, reducing the likelihood of an oil supply disruption.
More importantly, however, prices today are now lower than they were before the political risks escalated last week, underscoring our view that prices near $75/bbl were driven more by a combination of rising costs for long-term projects and near-term global demand strength for commodities than by the current geopolitical situation.

Global economic activity remains strong as US demand growth rises

Despite concerns over growth in the US, US demand growth for transportation fuels continued to rise this week, gaining more momentum after several months of extremely weak growth.
Outside of the US, Chinese economic growth continues to gain momentum, with 2Q2006 GDP reported at an exceptionally strong 11.3% pace yoy.

Further, recent strength in Euroland industrial production and manufacturing provides additional evidence of modest acceleration in Europe while the strong July Tankan survey for Japanese manufacturers suggests Japanese business confidence remains high.

US savings rate has accommodated the sharp rise in energy prices

In an environment of rising house prices and thereby rising household wealth, US households have so far used their savings as a buffer for recent energy prices fluctuations.

However, given the already sharp reduction in the savings rate, as the housing market slows and consumers come to accept that higher energy prices are not transient, then to maintain the current level of energy consumption either income will need to rise or the demand for other goods and services will need to be curtailed. As income is not likely to accelerate, the most likely outcome is that the demand growth for both energy and other goods and services will slow.

As a result, there will be a greater dependency on the rest of the world as the driver of energy demand.

[cube]

$this->bbcode_second_pass_quote('Chaparral', '.')..
Corn seems like it might be good for another 10 cent drop and Chicago white wheat seems like a good bet to short as well.
...

[truecougarblue]

I'm in the period of the month now where I really need to steel myself to avoid doing something stupid.

I agree that the Israeli thing is gumming up my model in the short term but especially because of this I think the time to short has passed this cycle. ( I say as I leave money on the table. )

[MrBill]

Hourly & daily charts both pointing higher after yesterday's lows on the back of ME & supply concerns, especially with some refinery fires and outages that are supporting unleaded spreads at +$21 per barrel and crack spreads between $15.85 and $17.50.

As is so often the case the low of the current move transpired with the maturity of the August WTI contract and due to the wider roll from August to September, on the continuation charts it looks like a gap higher. Enough to turn the technicals in any case.

Ironically, or perhaps dishonestly, PVDSA first indicated that there was no serious damage from their refinery fire and now it comes to light that the largest refiner in that area of world maybe down for 5-6 months. Thanks a lot guys! Bolivar idiots!!

Interesting enough, UBS has been introducing new structured products fast & furious, like the 'Oilfield' structured note that I spoke about earlier. Today they are sending me something new that is quite simple & brilliant for all you doomers & goldbugs in the crowd.

A 'Panic Bond on Crude and Gold'. One year USD bond that pays a 14% coupon (versus UST at 5%) if WTI crude breaches $100 per barrel (it does not have to stay up there, just move through this price level). A 8.25% coupon if gold breaches $750 per ounce. And a coupon of 17.5% if WTI crude breaches $100 AND Gold breaches $750. The note is 100% principle guaranteed at the end of one year so your downside is a zero percent return. No loss, no gain.

According to Jim Rogers, it is a sure thing! ; - )

[Doly]

$this->bbcode_second_pass_quote('MrBill', '
')A 'Panic Bond on Crude and Gold'.

[MrBill]

$this->bbcode_second_pass_quote('Doly', '')$this->bbcode_second_pass_quote('MrBill', '
')A 'Panic Bond on Crude and Gold'.

[MrBill]

Other inflation hedged notes
$this->bbcode_second_pass_quote('', 'T')oday, inflation is a mere shadow of what it once was: 4.3% on the Consumer Price Index versus nearly 15% in 1980.
There is small chance that the U.S. will suffer through anything like that in the foreseeable future. Still, it makes sense to have some inflation-fighting assets in your investment portfolio.
Treasury Inflation-Protected Securities -- or TIPS -- are bonds that adjust to match inflation. The principal of a TIPS increases or decreases with the Consumer Price Index for Urban Consumers, published by the Bureau of Labor Statistics. Since TIPS pay interest twice a year at a fixed rate, if the principal increases, so do your payments.
When the TIPS mature, you reap the adjusted or original principal, whichever is greater.
You can buy TIPS for a minimum of $1,000 through a broker or a bank or directly from the Treasury by going online

[MrBill]

$this->bbcode_second_pass_quote('', 'R')BC, 25.07.2006, Moscow 16:43:46.The last deal with Urals crude August futures amounted to USD70.60 per barrel as of 3:45 p.m. today, which is 3.11 percent higher than yesterday's closing price. The spread on deals was USD96.00-70.85 per barrel. The absolute record high on Urals deals is USD72.09 per barrel, registered on July 14, 2006.

Urals crude has been rising on the RTS today amid low trading activity and low trade volume. There have been only five deals since the session's opening today, which is three times less than at the same time of the previous trading session The trade volume is also low today, having reached RUR773,375 (approx. USD28,728), which is more than five times less than at the previous trading session.

Oil futures are advancing on global markets, too, though not so rapidly as on the RTS. This increase may be attributed to the threat of a halt to oil supplies from the Middle East and the reduction of oil products supplies to the US domestic market.

[cube]

$this->bbcode_second_pass_quote('MrBill', '.')..
According to Jim Rogers, it is a sure thing! ; - )

[Chaparral]

$this->bbcode_second_pass_quote('cube', '
')Chaparral do you day or swing trade?

The reason why I ask is because these commentaries make a world of a difference in meaning depending whether you plan on holding onto something either for 1 day or 1 month.

I prefure to swing trade but that's just me. You spend less on commission fees.

[Chaparral]

$this->bbcode_second_pass_quote('truecougarblue', 'I')'m in the period of the month now where I really need to steel myself to avoid doing something stupid.

I agree that the Israeli thing is gumming up my model in the short term but especially because of this I think the time to short has passed this cycle. ( I say as I leave money on the table. )

[rwwff]

$this->bbcode_second_pass_quote('cube', 'N')ot to scare any potential new recruits but.....Traders do NOT live a long life. However they make up for it by living an "interesting" life.

[truecougarblue]

I guess I've got an advantage then in that I only have half a brain and can barely bang out a single calculation, let alone multiples.

[drew]

Sorry about your luck rwwff! I just don't care, I guess. Well that's not true either, although I try very hard to not let my emotions rule the game. Maybe I am calm because I have never laid hands on any of my investment money. It was all originally borrowed so my direct experience revolves around debt service. Watching my portfolio grow by 25% a year since I began has been very very fun, but really it all seems quite abstract, and I have been only investing 3.5 years during a bull market. Of course I may feel like you if I start losing money, and that will suck no doubt. I guess I'll cross that bridge when it comes.

Tums free btw...

Drew

[rwwff]

$this->bbcode_second_pass_quote('drew', 'S')orry about your luck rwwff!

[drew]

Luck has to be part of it unless you're psychic. I have been lucky my intuition was right-and intuition is pure BS-nothing more than luck most of the time.

What do you call it then if you are wrong- or right then?

No one can see the future.

Hence luck.



I am all in too...

being on margin is way worse in my opinion.

if you are wrong you lose your money and someone else's- that sucks!

drew