[something_awfull]

$this->bbcode_second_pass_quote('idiom', 'F')or me its all still happening to people out there in internet land.

And I am a huge fan of Fallout, Stalker and Mad Max.

Not being in a target zone, ThermoNuclear War is still something that might happen to other people.

I did see the price of LPG go up by 10 cents while I was sitting in a forecourt. Even then it made me giddy. I am still 'Woohooo look at how much I am paying!!'

is this a bad sign?

[lowem]

Call it gallows humor, call it schadenfreude, or call it shock and awe. Or maybe it's just simple amazement at it all.

In the meantime, crude oil has dropped below $130 support and reached as low as $126.37 today afternoon Singapore time.

[lowem]

Guess we need some time to let the moving averages catch up a little. Even at $127 we're over 32% above the 200dma at $95.59. Watch support levels for now, but keep a lookout for a rebound toward $150 and beyond!

[chuck6877]

$this->bbcode_second_pass_quote('dohboi', 'C')huck, I think you are mistaking occasional gallows humor for glee, in most cases.

There is going to be volatility, more and more of it. But the price is going to keep going up over time. This has been the standard theory of all major peak oil theorists. Day to day, and even month to month timing of prices is, of course, nearly imposible. You seem to be making quite a bit about a one day (so far) dip. We'll see how long that lasts.

And I see no reason that gas prices shouldn't continue to rise, unfortunately, even if oil price stalls for a while.

So do you see the price of oil or of gas going significantly down in the next six months? Twelve months? Two, five, ten...years?

[chuck6877]

$this->bbcode_second_pass_quote('lowem', 'G')uess we need some time to let the moving averages catch up a little. Even at $127 we're over 32% above the 200dma at $95.59. Watch support levels for now, but keep a lookout for a rebound toward $150 and beyond!

[charliehelyes]

watch the charts oil is rallying back up its back at $129 and heading higher it may close over $130

[dohboi]

Thanks for the longer range predictions, chuck. They're pretty much in line with my latest thinking, though the timescale could be even shorter. I agree that the dollar will be worthless for buying oil or for much of anything else, but this could happen within a couple of years.

I just don't pretend to be able to call short term moves on the oil market. If you have been able to do so accurately and consistently, you must be a very wealthy man!

Oil wars are just one of many feedbacks that will drive the price ever higher, since they take huge amounts of oil to conduct. Basically, we are already in a Mad Max world, but the "gangs" are mostly national armies with a few terrorists thrown in.

Add to this positive feed back: Other wasteful "fixes" like corn-based ethanol, hording, export land use, keeping it in the ground till it's worth more, speculation, investors fleeing the dollar for lots of good reasons...and you have enough upward pressure on the price of oil to keep up with and overtake the negative feedback of demand destruction, whatever forms it takes, IMHO.

It also sounds as though drillers have been taking extraordinary measures to stretch out the plateau, which means the fall off will be (is becoming) even steeper.

[dohboi]

Back above $130 now. So much for the big "consolidation."

Again, we have been on an exponential upward curve since 2000, doubling every 2 years. If we stay on that trajectory, we will hit 160 this year, and 320 in 2010.

But the price curve seems to have steepened considerably, going from $90 in February to $135 last week, a 50% increase in just over three months. That would be a doubling every half year or so, if it continues, putting us at something like $570 by this time next year.

And of course the time it takes to double could continue to shrink. And then the sky's the limit, meteoric rises in the next few months with collapse in about a year. Given the numerous feedbacks coming in to play (to which one could add any number of above the ground factors, weather not being the least), this last, grim scenario seems the most likely, unfortunately.

[chuck6877]

$this->bbcode_second_pass_quote('dohboi', 'B')ack above $130 now. So much for the big "consolidation."

Again, we have been on an exponential upward curve since 2000, doubling every 2 years. If we stay on that trajectory, we will hit 160 this year, and 320 in 2010.

But the price curve seems to have steepened considerably, going from $90 in February to $135 last week, a 50% increase in just over three months. That would be a doubling every half year or so, if it continues, putting us at something like $570 by this time next year.

And of course the time it takes to double could continue to shrink. And then the sky's the limit, meteoric rises in the next few months with collapse in about a year. Given the numerous feedbacks coming in to play (to which one could add any number of above the ground factors, weather not being the least), this last, grim scenario seems the most likely, unfortunately.

[dohboi]

$570 would be totally shocking, but notice that that is not my worst scenario.

How many well informed and well paid professionals in the field would have told you confidently just a year or even a couple of months ago that $135 oil is just impossible. Just about all of them, I would guess.

I'm guessing that models that worked fairly well on the up-slope are just not going to be very much use on the plummet down.

[idiom]

As soon as it hits $200 we should see price fixing, rationing etc which should slow price growth by creating shortages. The inelastic parts of demand should begin to snap shortly thereafter.

So while the price is trending to heaven, how high it goes will be limited by the non-linear collapse points.

[dohboi]

I'm sure that there will be a lot of non-linear surprises, but again we left linearity behind in 2000. Since then we've been on an exponential growth curve. This before PO or even widespread awareness of PO.

So now that both awareness of peak oil is growing, and actual PO has probably happened or soon will, should we now expect anything less than exponential price growth from here on out? I just don't see how that could be, in anything but the very short term.

In fact, I can't see how we can expect anything other than a further acceleration of price growth from here on out, whether that's just a steeper exponential rate, or some kind of hyperbolic "off the cliff" curve.

Again, not to say that there won't be dips and ever-wilder fluctuations on day-to-day and week-to-week time scales.

[Dan1195]

Crude is actually dropping after the inventory report came out. My guess is the perception of demand destruction taking place is the cause, possibly in combination with the statement that the oil is there in the Gulf but just has not been unloaded. We have also seen in recent weeks the inventory report by itself it not a main driver in price on the day it is released. We see large up movements with seemingly bearish reports so vice versa is not surprising.

[chuck6877]

Notice that after the VERY BULLISH inventory report came out that said oil inventories dropped the most in 3 and a half years the oil price spiked up past $133 and then quickly dropped to now in the $127's?


This is VERY BEARISH for West Texas Intermediate Crude in the short run. Good news for the price of oil is no longer causing the oil price to rise. This is just more proof that the price of oil will be going down for a while to work off the overbought condition that oil is in.

Don't worry cheerleaders it will go back up and eventually on to $150, $200, $300 and eventually over $500! It just has to take a breather
Jet

[olekriri]

$126.50 now. Looks like "demand destruction" is finally hitting the price.

[lowem]

Crude oil tumbles!
Peak Oil is debunked!
We are saved!

Not.

[dohboi]

There's a lot of bouncing around=uncertainty. I'm still waiting for a "big" correction. Not that it couldn't happen short term. But a couple percent up or down is just not very impressive.

[TheDude]

Wait 'till word gets out about the drop in crude oil inventories.

TWIP is overdue, too...

[Dan1195]

I am still trying to figure out why tankers in the Gulf would be delayed. Over at TOD there is mention that there have been no actual reports of issues with fog at the ports. Reporters were contacting the Coast Guard and they said there were no fog issues. Begs the question whether tankers are actually sitting in the Gulf or if the exports actually got "delayed" because they went someplace else or held up to do supply issues (i.e. Nigeria). Guess we will find out in 6 days which is true. One would expect a large build with the EIA explanation.