How To Play Oil

[peanuts]

Do you think India and China...

They can consume all they want. It won't affect price much. When all this supply hits the market, demand won't be enough to drive the price higher. The demand will only stabilize it.

...I am thinking that oil will not fall that far. The President of PBR also says that oil will rise in the next five years.

The long term oil futures market has price stabilized around $70 until 2012.

It's all over. Incredible to think so, but it is. The oil boom has O-fficially gone bust
today.... Just like the dot coms. It's all over.


NEXT!!

It's not done going down. The "next" thing... well, my opinion is that firms who were able to still be profitable with oil as a main ingredient to their operations will suddenly be awash in cash as their profit margin greatly increase with every drop in the price of oil. I like electricity generation, pharmaceuticals, and chemical companies.

You?

[New-born baby]

They can consume all they want. It won't affect price much. When all this supply hits the market, demand won't be enough to drive the price higher. The demand will only stabilize it.



The long term oil futures market has price stabilized around $70 until 2012.



It's not done going down. The "next" thing... well, my opinion is that firms who were able to still be profitable with oil as a main ingredient to their operations will suddenly be awash in cash as their profit margin greatly increase with every drop in the price of oil. I like electricity generation, pharmaceuticals, and chemical companies.

You?

I dunno. Too early to tell. Sell gold.

[peanuts]

I dunno. Too early to tell. Sell gold.

On a fundamental aspect, then, you feel the US Dollar will strengthen?

[peanuts]

Billyjoe, oil will drop, and drop much much much much further than $140 (as already witnessed)

Exxon Mobil will begin production of Cebu oil this year (read the last line of this article)

Gazprom is bringing production online at their Shtokman Field this year also: (read about it here)

Well Mr. Demand.... here comes some Mr. Supply. And whoops! there goes the price of oil to $50.00

(this important post will be buried shortly)

That would suck.

Yes, Mr. Market, it would suck! Imagine that the Arabs, who were getting rich off of high oil prices and buying incredible amounts of US debt with those oil revenues, suddenly can't afford to buy the same amount of debt because they don't get enough oil dollars anymore... the US will keep spending, debt will continue to rise, but who, Mr. Market, will still buy our national debt when the Arabs can't anymore? Do we want Russia and Indonesia to start buying our country with their new oil dollars? Will they even want to trade their oil in dollars? If dollars aren't used for oil, then what currency? What will the dolar be worth, if it's not backed by oil?

The whole system that Kissinger helped to set up won't continue to work. The dollar won't be worth much at all at that point in time. Yes, it will suck... so much so that we might even be able to hear it. But what we hear might be more like explosions.

So, will it be high oil prices forever? We should hope so!

[New-born baby]

On a fundamental aspect, then, you feel the US Dollar will strengthen?

No, US dollar will not strengthen much, imho. But gold often moves with the oil price. IF oil is going to $70, gold will fall, imho. Just think Peanuts: if oil dropped to $70, and US dollar weakened even more . . . .

[peanuts]

On a fundamental aspect, then, you feel the US Dollar will strengthen?

No, US dollar will not strengthen much, imho. But gold often moves with the oil price. IF oil is going to $70, gold will fall, imho. Just think Peanuts: if oil dropped to $70, and US dollar weakened even more . . . .

NBB,

Oil continues to fall, the USD has strengthened lately, Gold is up...

These are crazy times. Oil should continue to weaken. Both political parties want to bring more production online on top of what is expected in the next few months and years. There are delays in bringing production online in 2 large developments (Gazprom- Shtokman field and Exxon Mobil- Cepu field). But, the price of oil continues to drop. (Rightfully so, in my opinion.) However, these developments should have a positive effect on the price of oil. Speculation is rampant and driving prices all over the map. There is no such thing as stabilization and dependable economics. Reports are unreliable and CEO's lie more than politicians.

The only safe haven to me is precious metals - Gold and Silver specifically.

Short the dollar, long metals, stay away from oil. This system is corrupt and on the verge of being shattered. IMF is pulling the strings on this puppet world economy

[New-born baby]

$20/bbl oil

2002--was was $20/bbl--plenty high enough.
2008--headed back that way.

Dow theory says crude to $60--or lower.
PnF had no opinion as of last night. But PnF is always a little slow reacting.

Global economic collapse. That would be HUGE.

[mrmarket]

It certainly is interesting. In 10 years when we look back at this, would it all seem funny?

[New-born baby]

It certainly is interesting. In 10 years when we look back at this, would it all seem funny?

If we have global economic collapse, and Obama wins, he could easily turn into the dictator we don't want.

[peanuts]

Posted on July 25, with oil trading at nearly $120:

Billyjoe, oil will drop, and drop much much much much further than $140 (as already witnessed)...

... there goes the price of oil to $50.00...

The Arabs will go broke. They will not buy our debt anymore. The US Dollar will be worth only the paper it is printed on.

Consumer staples will go up. InBev made a great decision.

Cosmetics, a cheap way for women to make themselves feel better, will be an excellent investment opportunity.

Oil shieks will go back to riding the camels they were on 50 years ago.

And, during all of this, the US sheeple become media-influenced, and elect a president that has historically voted the party ticket along with a democratic legislature, AND with 2 seats on the Supreme Court most likely coming open... Folks, we are SCREWED!!!!! And not just now, but for a looooong time.

Thanks a lot Greenspan!

Rant over, thanks for listening

[billyjoe]

Peanuts,
Is the US sheeple a new type of currency in the future? Should we hold on to our dollars or will the sheeple be more valuable? The dollar is backed by paper. What will the sheeple be backed by? Thanks for your response. You're a regular Nostradamus with that oil call. Have you been hitting the Iron City tonight? Do they still make Iron City?

-------------billy

[peanuts]

Peanuts,
Is the US sheeple a new type of currency in the future? Should we hold on to our dollars or will the sheeple be more valuable? The dollar is backed by paper. What will the sheeple be backed by? Thanks for your response. You're a regular Nostradamus with that oil call. Have you been hitting the Iron City tonight? Do they still make Iron City?

-------------billy

sheep are pretty dumb animals... easily led astray. They like to graze in groups and they all look and sound alike. Sheep are fattened over time by easy to obtain feed, and then slaughtered all at once.

Sheeple are people that are more like sheep than they are like unique, smart, and thoughtful individuals.

Iron City Beer is still made by the Pittsburgh Brewing Company. It still tastes terrible, and gives me a headache and hangover. Perhaps it is the water they use...

[mrmarket]

This unprecedented slide in oil prices is going to pay big dividends to oil companies in the future.

Right this very minute, project budgets are being slashed or scaled back..which means no one is looking for any new oil at these low prices.

So, when demand for oil finally takes off again, and it will, there ain't gonna be no oil.

What does that mean? $250/bbl. That's what it means.

Write it down.

[billyjoe]

I'd like to bury a tank in my back yard and fill it at 1.69 from Krogers. In the olden days even in the early 70's lots of folks had their own tanks, especially the farmers.

In 1974 a salesman for the company where I worked drove a diesel Mercedes and bought 1000 gallons at 33 cents per and they let him use a tank at the foundry to store it.

------------billy

[JohnHenry]

Back in late June 2008, before a barrel of oil was $147 in July, IBD had an article and the oil minister said that oil was over price, we will see a put back to $78 before end of the year and maybe $50 by mid 2009. At that time GS, Crammer, and others said that oil was heading $180 by September 2008; well we know they were all wrong. Others also said that $21 a barrel is still profitable.

My question, how would Joe the Plummer profit if oil tanks to $21 and maybe skyrocket back up $147 in the future. Does he buys oil ETF, options, or buys a barrel directly at the asking price? Any thoughts?