[AirlinePilot]

After OPEC announces official production cuts, the market for crude oil prices goes.........

ding ding ding.....you guessed it!......

down

Kind of makes you go hmmmm......

I don't know about others around here but something smells rather fishy to me. I guess we are going to have to wait and see what happens over the next few months. I would expect at least a very minor correction in prices towards the updside with everything that is going on.

Still maintaining my medium range doomerish outlook but not really worried about the near term. We will continue to happily plow through what easy oil remains rather quickly though I think.

[joewp]

It is fishy, Pilot. Every time the market shows some signs of buying coming in and the price rises, there's a lot of selling. The Commitment of Traders report is showing that the large speculators (hedge funds, brokerages, large commodity funds, etc.) have been selling their longs and selling short for the last 2 months or more.

It might be just me, but aren't those guys interested in keeping their favorable tax cuts on capital gains and dividends, and that's something a Democratic controlled Congress might look into getting rid of? And doesn't Bush's (and Rep Congresscritters) approval rating rise and fall with gasoline prices?

Hmmm....

[NEOPO]

hmm indeed....perhaps the effect of this news helped prices rebound or stabilize before the "official" annoucement.

I mean it was several weeks since we heard they wanted to cut, knew they were going to cut and then officially reported the cut.

Not trying to suggest that manipulation is not occurring as that seems fairly evident yet the degree of control is debatable.

[Zardoz]

"Fishy"? Ya think?

Watch what happens after the election is in the books. Give it a month or two, or three, so it won't look so obvious, and we'll be paying through the nose again, like we should be.

This is a joke. This is power politics at its most blatant. We're being played like a god-damned piano.

[RonMN]

Fishy...yes! But don't be so certain about the "near term".

1929 didn't leave much for prep time. All looked good back then...until it didn't.

[turmoil]

Calm before the storm?

[RonMN]

The "rush of enthusiasm" before the storm is kinda what i'm thinkin'

[JPL]

$this->bbcode_second_pass_quote('RonMN', 'T')he "rush of enthusiasm" before the storm is kinda what i'm thinkin'

[toadster]

It's all explained by Technical Analysis. In order for the technical analysis theories to be valid one base assumption must be true. The assumption is that the market has already been adjusted for any fundamental news released. The rumor that the OPEC was going to cut production was floating around a few weeks before their actual meeting. What happened was traders bought on the rumor. The market had a short secondary trend due to the rumor but after the rumor was confirmed the market continued its primary downtrend. This is basic Dow Theory.

[Dreamtwister]

I'm thinking $80 by Christmas. $85 if the winter is as cold as they are expecting.

[Jack]

Fishy? Yes...sorta like week-old dead mackerel lying in the back of a closet in a warm house.

Speculators make money on volatility, not stability. We're making some new highs on the Dow right now, so the fools will rush in to buy. TPTB generously sell to them and raise cash. This continues through the Christmas buying season, after which (wonder of wonders) stocks go down, interest rates go up, and housing goes crunch. Yes, oil will go up a bunch too. Just in time to make those Christmas bills really hurt.

All this is profitable too, you see - buying foreclosed properties can by a good little money maker.

Thus, we transfer assets from the proles to wiser hands. Sweet, isn't it?

[sch_peakoiler]

$this->bbcode_second_pass_quote('Jack', 'F')ishy? Yes...sorta like week-old dead mackerel lying in the back of a closet in a warm house.

Speculators make money on volatility, not stability. We're making some new highs on the Dow right now, so the fools will rush in to buy. TPTB generously sell to them and raise cash. This continues through the Christmas buying season, after which (wonder of wonders) stocks go down, interest rates go up, and housing goes crunch. Yes, oil will go up a bunch too. Just in time to make those Christmas bills really hurt.

All this is profitable too, you see - buying foreclosed properties can by a good little money maker.

Thus, we transfer assets from the proles to wiser hands. Sweet, isn't it?

[DantesPeak]

Even the futures market thinks something is up.

If you look at the November 2006 oil futures contract (which expires by the end of October) vs. the December 2006 contract (November delivery), you will see that the December sells for $2.00 more than November. This is much more than typical this year. Not only is that a big absolute amount, but the difference is so large that it may be profitable just to buy oil in US storage (not on the high seas of course) and just hold on to it – you’d make an annualized gain of about 40% less storage expenses.

Further if you believe that OPEC will follow through on its 1.2 million bpd production cut (they’ve already cut 2/3 rds of that amount through October), then the entire incremental year over year gain in US crude inventories will be totally gone in about the next 90 days (assuming current export and shipping trends continue).

That's when the fun begins.

[TreebeardsUncle]

Well, the oil prices generally head down in the fall, back up a bit in the winter due to demand for heating oil, and then up significantly for the US summer driving season. With the bust of a hurricane season, and some degree of relaxing of political tensions, along with the conveniently released info about the old big new find in the Gulf to be worked by Chevron et al, the speculators are no longer bidding up the price so much. There will still be a bit of a glut around 2010 - 2012 due to increased production from fields in the ME, Caspian, Gulf of Mexico, and off the west coast of Africa. After that PO should begin to make its impacts felt. A lot of people are prone to see elaborate manipulation, funny business, conspiracies routinely. The feds did release oil from the reserve last fall and the price dropped before the Chrismas holiday shopping season and this summer they held off on putting more into the reserve and prices have come down before the election. Will it be enough to keep Republican congressmen in power and oil, auto, insurance, etc interests well supplied? Conspiracy theorists want to know.

[perdition79]

$this->bbcode_second_pass_quote('RonMN', 'F')ishy...yes! But don't be so certain about the "near term".

1929 didn't leave much for prep time. All looked good back then...until it didn't.

[joewp]

$this->bbcode_second_pass_quote('TreebeardsUncle', 'C')onspiracy theorists want to know.

[coyote]

$this->bbcode_second_pass_quote('perdition79', '[')url=http://www.dogsofthedow.com/dow1925cpilog.htm]Dow Jones adjusted for inflation.[/url]

[ziggy]

The inflation-adjustments likely do not adjust enough for inflation. I don't know, as I haven't looked to see what "inflation" data they use to adjust the Dow, but my guess is that they are using CPI. It says CPI on the chart itself so I guess that's what they use.

CPI today is NOTHING like it was 20 years ago. CPI has gone through many changes over the years that essentially make it undercount annual inflation by about half, if not worse. The speed by which this distortion has been introduced picked up steam in the mid 1990s with the Boskin Commission (google it). But essentially, the DOW would be even lower, especially in the periods for the last ten years, if real-world inflation numbers were used and not the CPI. The CPI is a total joke.

The inflation-adjusted DOW would probably be closer to 900, not 1000, as noted on that chart.

Want to learn more? Check these links out as but a start........


http://www.financialsense.com/stormwatch/2005/0624.html

http://www.shadowstats.com/cgi-bin/sgs/article/id=343

http://www.undollars.com/archives/arch_ ... 05_06.html

[KevO]

coming soon to a town near you

CRASH

[willjones4]

What I dont understand is why prices arent lower given the current oil price. Shouldnt it be less than $2/gal with oil hovering around $58/bbl? Its like $2 is the threshhold...