Will oil go up or down

desdawg · July 22, 2008, 11:54:43 AM

I have heard so many conflicting reports about the direction oil is headed. Some say all the gains will be given back. Some say demand destruction isn't global so the demand will remain. It would make sense to me that with winter coming and home heating season demand will return in a couple of months. It is all pretty confusing as we are not just limited to what occurs in our own economy and our own part of the world. And yet we are effected by all of it.

benevolance · July 22, 2008, 01:54:36 PM

barring a major war or hurricane...Oil is going to go down considerably...

Iran is sitting on oil... stockpiling like crazy because there is more oil for sale on the market than there are buyers for it. I think that they have 30 million barrels stockpiled ready to sell if there was a buyer.

Saudi Arabia is pumping at less than half of their full capacity...Iraq is pumping less than 30% of their capacity thanks to us blowing their oilfields to smithereens...

Our economy tumbling will slow down other countries growth as well and the whole world will see a slowdown of sorts... Too much oil on the market and a slow economy worldwide ...Oil is destined to drop in a big way.

I say it hits $100 a barrell by labour day... IMHO

July 22, 2008, 02:19:44 PM

The idea that in 3 days oil can come down nearly 20 bucks a barrel on the idea of demand destruction floors me. I don't think macro level changes work so fast - that is a huge move for such a short period of time. Also today is August contract expiration, were seeing some percentage of people selling off contracts so they do not take delivery. More sellers than buyers = price goes down. In past months this mostly rolled into the next month contracts .. I find it curious that as oil slides this week, financials rocket back up. Almost like watching money leave one sector and march into another. I don't know what the price of oil is going to do by labor day or even tomorrow.

peternap · July 22, 2008, 03:20:03 PM

Quote from: muldoon on July 22, 2008, 02:19:44 PM
The idea that in 3 days oil can come down nearly 20 bucks a barrel on the idea of demand destruction floors me. I don't think macro level changes work so fast - that is a huge move for such a short period of time. Also today is August contract expiration, were seeing some percentage of people selling off contracts so they do not take delivery. More sellers than buyers = price goes down. In past months this mostly rolled into the next month contracts .. I find it curious that as oil slides this week, financials rocket back up. Almost like watching money leave one sector and march into another. I don't know what the price of oil is going to do by labor day or even tomorrow.

I agree and I especially agree that it's odd that oil is going down and financials up. All that happening during a week when naked shorts that are already illegal, are especially illegal

That should have no effect on oil and most of the covering has already happened in Financial s.

The whole thing is ODD and hard to predict.
My guess is that oil will be back up by labor day.

desdawg · July 22, 2008, 04:22:05 PM

I see that the pump price here has dropped 7 cents here since the last time I filled at my favorite station. I didn't fill today just noticed driving by. The message over the weekend was mixed and I was trying to decide rather or not to sell the oil stocks I have. After PDO paid off I decided I was playing with the houses money so I got more into some more small domestic energy companies.They are all small bets and won't make me as much as I will save at the pump over an extended period. If everyone goes back to driving like they used to demand destruction will be short lived. And all of those vacations that weren't taken this summer will become a reality. Caution will flee for many. Personally I have made very few trips to the mountains this summer. I see this as an opportunity to catch up a little on the work I haven't been getting done there so I plead guilty myself. Plus like I said the winter is coming with it's inherent use of heating fuel nationwide. Oil provides for more than just transportation needs. Although that is where we become most painfully aware of it as it is a constant need as we commute here and there. I think it is a mixed bag and like muldoon says it won't travel in a straight line although it is at the moment. The current direction is down. I really have to get my crystal ball out of the shop. Surely it is tuned up by now. Plugs, points condensor. Nothing worse than a crystal ball with a bad condensor. I should maybe sell now and buy back later at a reduced price or wait for the next spike and sell then. Decisions decisions.

July 22, 2008, 04:49:40 PM

They've already tasted blood. They may let loose of our arm for a bit but I don't see them giving up our leg soon.

Pox Eclipse · July 22, 2008, 05:08:32 PM

It's going to go up and down. But over the long run, my money is on up.

Quote from: benevolance Saudi Arabia is pumping at less than half of their full capacity...

That depends on what you mean by "capacity". If you mean the maximum they can pump out of the ground with existing infrastructure, you are incorrect. Saudi capacity is currently 11.3 million bpd, and in July they have been pumping at 9.7 million bpd, or about 86% of capacity. They will be expanding capacity to 12.5 bpd by June of 2009 and claim they will pump at that capacity for a short period before dropping back to 10.4 million bpd. They have a long standing policy of keeping 1.5-2.0 million bpd of idle capacity.

benevolance · July 23, 2008, 08:21:03 AM

well one of the reasons I believe oil will come down is that they have stuck it to the consumer for a while now and the market has beared all it could handle of the high prices that were completely unecessary ... Price has been driven to all time highs due to nothing but speculation on the market... all of which has nothing to do with actual supply or actual demand. Investors fund managers etc.. driving the price sky high....and while the oil companies are making record profits they are buying all their company shares back driving the cost of the shares through the roof.

In a way this was almost an artificial high... no not like buying bad weed and pretending it is choice... this is a price spike that had nothing to do with demand, usage or supply. Now that the entire world is in recession Demand is way down... the money to pay for oil is way down... People all over the world are starting to polarize in the idea that we need to use something else other than oil..

the natural reaction for this is of course lowering the price back to a semi normal level and allow the people to return to their oil consuming lives so that they can make record profits again once the world resumes being comfortably addicted to oil.

When oil goes below $100 a barrel... and gasoline is at $250 a gallon all will seem right with the world again for most americans...Then slowly we can dig ourselves out of this recession and get prepared to go through this circus all over again in the near future

ScottA · July 23, 2008, 08:29:49 AM

I don't think we'll ever see $2.50 a gallon gas again. It may go down to $3.25 if we are real lucky.

July 23, 2008, 08:47:53 AM

Scott

Gas is already pushing towards $3.50 a gallon here...it is low $3.60's

Once oil drops below $100 a barrel I expect to see it well below $3.00 a gallon

considerations · July 23, 2008, 09:01:27 AM

The cheapest gas in the county here is 4.33/gal. Most of it is still 4.65 or so

apaknad · July 23, 2008, 09:09:59 AM

sad, but true. i hope everyone will be mad enough about this oil scam to keep looking for alternatives even if the price stays down. but i won't holld my breath.

Redoverfarm · July 23, 2008, 09:18:00 AM

$4.03 in the Mountain State. But deisel is still in the clouds at $4.79 Ouch!

benevolance · July 23, 2008, 10:28:56 AM

Diesel is still $4.50 a gallon here... It is ridiculous

July 23, 2008, 10:44:51 AM

I passed 3.81 for regular unleaded this morning, and with rboc falling I think it will keep going south for at least a few more days.

Today, the senate and congress will vote on H.R. 3221, known as the housing bill. This will raise the federal debt ceiling some 800 billion and give Paulson the blank check he asked for to bail out banks and gse's. It looks like it's a slam dunk with no chance of not being passed. With taxpayers on the hook for any losses, these banks look like a good place for money to flow into .. no need to stay in commodities for safety as the us taxpayer is about as safe as one can get in my opinion.

Here is the FNM/FRE bailout part, http://www.rules.house.gov/110/text/110_atostohto3221.pdf

Commodities are getting crushed, http://www.bloomberg.com/markets/commodities/cfutures.html

oil, gold, wheat, cotton, soy, nearly everything. This takes the risk of a fast "crash" out of the picture for me and replaces it with a long depression. Looking at the TNX this week I see the price of long debt going up. This time next year, mortgages may likely be 10%... what will that do to the housing market?

desdawg · July 23, 2008, 11:24:50 AM

We have unusually high gas prices here where I am at. They are holding above $4.00. I just checked Tucson & Phoenix which are more in line with what you are seeing. In the $3.80-$3.90 range. After about 3 month's I have finally received a counteroffer to a bid I put in on a duplex, (short sale). I guess I better get my mortgage application in pretty quick given this turn of events. The price on the duplex is good. The default mortgage was 120K and the counter was at 63K. This was an IndyMac mortgage originally.

desdawg · July 23, 2008, 04:16:58 PM

Stock prices dipped and I was down then they came back up about 10% from where they had dipped to. Confusing for an easily confused country boy.

benevolance · July 26, 2008, 03:11:43 AM

Well thankfully the proce keeps dropping on oil...It hit $122 today in trading... Slowly it keeps inching down

Like to see it below $100 a barrel by labour day

apaknad · July 26, 2008, 08:01:28 AM

filled my 36.5 gallon gas tank yesterday@ $3.77 a gal. only cost me $118.00(it wasn't empty). saw gas for $3.74 later. now if i could just figure out a way to make my pension payment increase. $:-\$

peternap · July 26, 2008, 09:43:40 AM

Wait until next week and see what it does. That should be a better indicator of what it will do. This week was influenced.

July 26, 2008, 02:34:20 PM

Well prices at the pump have not come down really much at all considering that oil has dropped $25 a barrel in the last 2 weeks.

If the price of oil does not go up...We will start to see even better prices at the pumps..I expect gasdoline to go down 5-10 cents a gallon at the pumps this week if oil stays around $120 a barrel

ScottA · July 26, 2008, 03:26:21 PM

Regular unleaded is $3.84 here today. That's down from $3.87 last weekend.

benevolance · July 26, 2008, 03:57:38 PM

Scott

That really is an insult considering that the price of oil has come down $25 a barrell which is what a 16-17% drop in the price of crude...I just hope that as we see a continued drop in the price of crude and gasoline worldwide we will see the benefits at the pumps here... I am expecting noticeable drops in gasoline in the next 2 weeks...

It would be nice if we saw a 20% reduction in the price of gasoline...From $4.00 a gallon into the $3.25 range...We have cheap gas here in Rural South Carolina (columbia is gross but rural areas are okay) I expect gas to be under $3.60 a gallon in the next day or two...I am holding out hope for $3.50 a gallon in a couple weeks when I have to make another trip to Canada towing vehicles up north.

glenn kangiser · July 26, 2008, 04:15:28 PM

Don't expect miracles. Big oil is in control of our government. What do they have to worry about? A sham investigation? Yeah - sure -- I will go out and check into what my left hand is doing.

benevolance · July 26, 2008, 10:03:41 PM

Well We filled up tonight for $3.57/9 a gallon in the Saturn wagon...I am hoping for another 10 cent decrease in the next week