[MrBill]

A place where people may talk about energy & commodity markets and what is driving them. Especially in terms of how today's markets may foreshadow or give us hints as to what will happen post peak oil.

Just letting the old thread die and starting a new one here. Welcome to 2007!


The poll did not allow the 7th option:

under $50 per barrel
around $55
around $60
around $65
around $70
around $75
over $80 per barrel



Caveat Emptor/ex-ante/post-ante/Code of Conduct/etc./
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[Concerned]

I have guessed around $65. It seems to me the world economy really can't handle $75+ oil sustained, even $65 is tight.

With new projects coming on stream in 07-08 and potential softness in the USA it's hard for me to see $80 oil or higher unless you have a Katrina type storm or an attack on Iran.

Whats your guess MrBill?

[MrBill]

I typed in $60 today. It is a totally neutral prediction lacking any balls whatsoever. My gut feeling is LOWER, but I just cannot bring myself to write $45. I guess I have some investments that look a lot better above $60 than below, so I have an inherent bias?

However, that said, I think we are in a mild weather market. 2007 is supposed to be warmer due to the el Nino effect and due to global warming? But stocks will adjust to the warmer weather and eventually be drawn down. Then OPEC will be forced to defend price targets via production cuts. After that then geopolitical events will again come back to the foreground. Like Nigeria for example as well as Iran.

I received quite a few research reports over the past few days, so I am looking forward to going through those and posting the best recaps here for everyone to read. Needless to say, many thought 2006 would end much stronger than it did. 2007 is starting out very soft. It is a long time until December again, so many things can and will happen. I just hope we are not in a weather driven market all year long.

In any case, thanks for your post and let me update as soon as I can. Thanks.

[MrBill]

Alberta nat gas exports and exploration forecast down.
$this->bbcode_second_pass_quote('', 'C')anadian natural gas exports to the United States could post the largest drop in a generation in 2007, an analyst says, as exploration cuts reduce supply and home-grown demand to fuel oil sands output booms.

Martin King, who follows energy commodities at FirstEnergy Capital, a Calgary investment bank, expects exports to fall by up to a billion cubic feet a day next year, down about 10 percent from current shipments around 10 billion cubic feet a day.

[chris-h]

Disclaimer : I am not a trader do not intent to trade just expressing my honest opinion here.
I have not voted.
I predict $100 or more.
My explanation why prices are falling now.
Because traders really believe that producers mainly SA can produce more . Every time that SA says we are going to cut exports they think :
gee peak oil and depletion and Simmons are wrong : they just want to make more profit and we have military and economic power to make them change their mind.
Once traders understand that SA is lying and cannot produce more panic will ensue.
That is why i predict price of $100 or higher.

[MrBill]

This is an issue Belarus cannot win, but it can sure tarnish Russia's reputation as a reliable supplier of oil & gas to the EU and the rest of Europe in the process.
$this->bbcode_second_pass_quote('', 'M')insk decided to introduce a duty of $45 per ton on Russian oil that transits Belarus' territory to offset the losses that the country is likely to suffer after the Russian government last month imposed an export duty on crude oil supplied to Belarusian refineries. Belarus said that the move was in violation of several bilateral agreements on duty-free trade, but Moscow leveled counter-accusations, saying that it was Minsk that ignored Belarusian-Russian deals by refusing to share revenues from export duties on petroleum products.

In a statement posted on the Belarusian Council of Ministers' website on Friday, the cabinet said that Belarus is the owner of all oil pipelines running through its territory and has the right to charge the transit fee.

[MrBill]

$this->bbcode_second_pass_quote('chris-h', 'D')isclaimer : I am not a trader do not intent to trade just expressing my honest opinion here.
I have not voted.
I predict $100 or more.
My explanation why prices are falling now.
Because traders really believe that producers mainly SA can produce more . Every time that SA says we are going to cut exports they think :
gee peak oil and depletion and Simmons are wrong : they just want to make more profit and we have military and economic power to make them change their mind.
Once traders understand that SA is lying and cannot produce more panic will ensue.
That is why i predict price of $100 or higher.

[drew]

Hey, welcome back, Mr. Bill

and a happy new year, of course...

$this->bbcode_second_pass_quote('MrBill', 'I')n any case, a sustained blast of colder weather will be needed to turn market sentiment around. In the meantime, I would look to sell into any rallies at this point as opposed to buying the dips.

[MrBill]

Thanks Drew.

Well, $52.95 was the low in the WTI today. The Elliot Wave gurus targeted $52.95. Dumb coincidence? I think not. But let us see if it holds now?

$this->bbcode_second_pass_quote('', 'C')rude Oil - Nymex US$ (Dec.'06 & Jan. '07):
Summary - declines below the 21st Nov. highs, and the 12th Dec. lows (60.40 Dec. and 6150 Jan.'07) negated any progress higher towards targets of 65.43. Instead, the accelerative behaviour in the current decline is identified as the final sequence within the entire downtrend that began from last year's high.

Ironically, original targets towards 52.95 calculated basis the longer-term weekly pattern sequences have at last, a realistic chance of being achieved - see fig #1. Sentiment remains significantly bearish and from a contrarian position, forewarns of a major reversal advance unfolding around the end of January during the next roll-over.

Shorter-term pattern sequences and fib-price-ratios have been revised to show the current decline finishing between 53.30-51.75 basis the continuation data series, and 53.90-54.145 basis the outright Feb.'07 contract - see fig's #2 & #3. Note the convergence with the weekly chart calculations. The following price recovery is expected to last for several months, acting as a counter-trend correction of the 81.24-51.45 decline. Interim targets towards 59.25, finally 64.65, the fib. 50% resistance level.

Alternative Scenario - similar to above except a low forecast to 52.28 ends a counter-trend decline that dates back to Aug.'05. In this scenario, the price recovery resumes the long-term uptrend with ultimate targets above 78.40 (81.24 basis Feb.'07 data series) - see fig #4. If this is to be realised, the movements higher will not adhere to the interim resistance levels at 59.25 and 64.65 mentioned in the preferential forecast.

Elliott Wave Count - oil's collapse in price over New Year has negated the count that advocated intermediate wave (A)'s conclusion at the Nov.'06 lows. Instead, the Nov.-Dec. advance is re-labelled as ending minor wave iv. four within (A), wave v. currently in progress. It was only last month that we had commented idealised targets towards 52.95 had run short - now we know why. Nevertheless, the significance of 52.95 cannot be ignored, as this level is where a golden section cuts the larger decline expected to 41.75 - see original chart from Oct. in fig #1.
Taking the continuation data series and the outright Feb.'07 chart for comparison produces similar price targets for the completion of minor wave v. five of (A) - between 53.30-51.75 & 53.90-51.45 respectively - see fig's #2 & #3.

Alternate Count - describes an expanding flat pattern unfolding from the Aug.'05 highs of 70.85 as minor wave iv. four - see fig #4. Subdividing into minute degree, a-b-c, wave c nearing completion towards 52.28 where wave a is extended by fib. 23.6%.Should this wave count be correct, it will necessitate an advance above last year's high as the next impulse wave within the longer-term uptrend.

[MrBill]

Crude just jumped 90 cents and I am looking all around for a reason. Then I saw the headline that American soldiers have invaded the Iranian Consulate in Iraq. Yep. I guess that might do it? No follow through, yet, so will wait for the next clarification.


Update: Jean Claude Trichet just came up with an interesting comment.

"We do not campaign for international use of (the) euro, but (we) don't discourage it."

I wonder what that means for the US dollar? Europe will have to radically expand their financial markets if they hope international flows will find their way into euro assets. And here I thought their job was fighting inflation? Hmm, what can you expect when you put a Frenchman in charge of an EU institution? Mission creep.

[MrBill]

Not much new news out there, so the bashing of crude continues unabated. Looks like a sloppy close to the week as we head into the Friday afternoon session. I certainly do not have any new ideas.

$this->bbcode_second_pass_quote('', 'T')he lack of weather created the perfect storm for lower oil prices. But underlying bullish fundamentals remain intact

Our positive fundamental outlook remains intact, but the market could move lower near term

What began as an entirely fundamentally driven move in oil prices has been exacerbated by new producer hedging programs and by the increased selling of crude oil futures by non-commercial traders as they manage the risk incurred from existing producer hedging programs in a falling price environment.

Consequently, while we still maintain our positive outlook on medium to longer-term fundamentals and prices, we also believe it is important to recognize the dynamics of the current trading environment and the near-term risk that the market could go lower before it goes higher.

[MrBill]

This might interest some peak oil investors. A new index from Merrill Lynch.

$this->bbcode_second_pass_quote('', 'L')aunching the ML Renewable Energy Index

The objective of the ML Renewable Energy Index is to provide exposure to stocks which are well positioned to benefit from the renewable/alternative energy theme globally. We have identified stocks in each of the three largest renewable energy sub-sectors, namely biofuels, solar and wind and filtered on several criteria - market cap, liquidity and country of listing.

We launch the index today with 22 names, the aggregate value of which has increased by 216% (in US$ terms) since Jan 2002, outperforming the MSCI World Energy Index by 120%. Despite this, we still see considerable upside potential ahead as the sector matures and the longevity of key drivers are better understood.

Index covers 80% of market and remains sufficiently liquid
The ML index captures almost 80% of the market cap of the broad renewable energy sector after the application of three tradability screens i.e. market cap, liquidity and country of listing. The constituents of the index are then weighted by liquidity, defined as the six-month average daily turnover in US$.

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In fact we estimate that US$500Mn position in the index would represent about 1/3rd of a normal day’s volume of each name.

Out-performance with lower volatility

We have backtested the index performance over the last 5 years and find that it outperforms the main energy benchmarks with lower risk.

The relatively low correlation between the ML Renewable Energy Index and the FTSE and MSCI benchmarks illustrates the recent decoupling that has taken place in this space.

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The index is calculated daily on a price return basis and published on Bloomberg under tickers MLEIREND (US$) and MLEIRENE (EUR).

[drew]

Nice rally on the tsx today!

So I sold the Nexen...

That was the conclusion of my Nexen 3 peat.

I made about 2000 bucks total by risking $5000 3 times over the past 8 months.

That was easy....whew!

Now that pesky gold/silver....

peace in the ME soon?

I think not...

Drew

[kabu]

I enjoyed the rally too, Drew. It cleared up a bunch of anxiety that's been accumulating throughout the week. A beautiful way to enter the weekend, I say! Even though I made a dumb trade right off the mark, overall I'm up $1300 for the day. And for me, that's pretty exciting, because it takes me two weeks to make that off my day job: hard labour that started screwing up my back over 1 1/2 years ago... and I'm only 25...

Anyhow, my portfolio's back up to +50% from the middle of October, which is where I sold off my Sentry PM fund and got into trading with both hands! Things could easily turn on me, though, because I just finished tying half of my portfolio's value to a junior financial that's been accumulating uranium and other metal interests (Augen Capital). It's done me well so far, and some added volume should swing up into another breakout. Then I'll call it a year and it's off to Brazil!!!

[drew]

I am so glad you are starting off young! I have only been investing for two years on my own, and 4 years including the bank's 'advice'.
I am 43, you are 25. I need to take way more risk than you do because of the effect of compounding. Still though it is a lot of fun and I am somewhat of a risk taker at heart. Do you trade primarily stocks or do you like etf's and other things such as mutuals? I muck around with stocks primarily but I also have some money in mutuals.

Drew

[kabu]

$this->bbcode_second_pass_quote('drew', 'I') am so glad you are starting off young! I have only been investing for two years on my own, and 4 years including the bank's 'advice'.
I am 43, you are 25. I need to take way more risk than you do because of the effect of compounding. Still though it is a lot of fun and I am somewhat of a risk taker at heart. Do you trade primarily stocks or do you like etf's and other things such as mutuals? I muck around with stocks primarily but I also have some money in mutuals.

Drew

[cube]

I think Saudi Arabia made the right choice in NOT proposing another cut. Had they did......they would of only damaged their repution in promising something nobody seriously thinks they would make good on.

On the other hand there's Hugo Chavez from Venezuela pushing for another cut. But of course I think we all know where Venezuela stands in terms of credibility amongst OPEC nations.

In the long run I think the Saudi decision will help prop up prices.

my 2 barrels of oil

[DantesPeak]

$this->bbcode_second_pass_quote('cube', 'I') think Saudi Arabia made the right choice in NOT proposing another cut. Had they did......they would of only damaged their repution in promising something nobody seriously thinks they would make good on.

On the other hand there's Hugo Chavez from Venezuela pushing for another cut. But of course I think we all know where Venezuela stands in terms of credibility amongst OPEC nations.

In the long run I think the Saudi decision will help prop up prices.

my 2 barrels of oil

[MaterialExcess]

I was one of only two so far to vote for under $50. I think we will be some where between 45 - 50. Just read the Depression 2007 thread agree with a lot of it. Remember now lower economic activity = lower demand for oil = lower oil prices. Even if we were to hit PO in 2007, a major economic down turn would negate PO impact on oil prices for the short term.

[MrBill]

$this->bbcode_second_pass_quote('MaterialExcess', 'I') was one of only two so far to vote for under $50. I think we will be some where between 45 - 50. Just read the Depression 2007 thread agree with a lot of it. Remember now lower economic activity = lower demand for oil = lower oil prices. Even if we were to hit PO in 2007, a major economic down turn would negate PO impact on oil prices for the short term.