Ping, ping - won again!


Luscious girls thrusting their tighs against mine again. Yea.

http://news.bbc.co.uk/1/hi/business/7739352.stm

We should start a new poll: Will Oil Fall to $49.99?

No, no, bratticus. When I asked: when will oil drop from $145 to $70 you couldn't stop laughing. But I (and two others, against 150 nay-sayers) were right.

Then someone asked: wow, it might drop to $50, and again, you, and a majority of nay-sayers said "impossible", whereas we were right, once again.

So don't ridicule your own mistakes. It's bad enough for you as it is.

We did it!!

Oil closes at $49.62


Yes, as in the $70 thread, I was rather conservative.

Congrats OF2....Oil at 49.07 we aint hit bottom yet!

I must admit to being stunned at just how powerful an effect the sweetly named "demand destruction" has been on oil and gasoline prices.

What this means is that a whole lot of economies are grinding to a halt rather quickly.

I will complement lorenzo and OF2 on any predictions they made about this milestone. But I have the impression that their predictions were based on assumptions that much more oil would be found or be replaced by biofuels...than that the price would crash purely due to demand destruction (which seems to be the case, as far as I can see).

So it's kind of like sinking the eight ball, but calling the wrong pocket. The way I play, that is not a winning stroke.

Dezakin wrote a few days back:

"As long as oil remains above $50 throughout the recession we stand a chance at decreased volitility over the next decade as large capital projects suck up investment. If it drops below $50 then that will spook large capital off of expensive oil projects (CTL, deepwater, etc) and volitility will rule the day for a long time to come."

So we are now on the other side of that prediction. Do you think it will hold? Or will the price have to stay well below $50 to have this effect?

I failed at the prediction

Back in reality, this is terrible... Oil producers must be shitting themselves.

It's not so much to do with demand destruction. We're just seeing speculators pulling out. For the oil price of the past few years, the speculation effect was much, much bigger than any change in demand. And that speculative bubble is still emptying air.

I think we can easily go to $35-40 by pulling out the last bits of speculative investment.

Any downward movement from that level onwards, will reflect real demand destruction.

No, that would have been illogical. Any biofuels can only survive with oil at high prices. Suggesting that biofuels would push oil prices lower, is irrational, because biofuels only work at high oil prices.

So biofuels can have an effect when the upward rush happens when it becomes clear that PO is really nearing. Then biofuels will limit the damage (even though, in only very small ways).


What we have really seen, is simply a gigantic speculative move into oil and commodities. That force is now pulling out, with collapsing prices as a result.

Yea dude, we did it again. --> there's a whole bunch of really sexy young chicks with luscious loins coming our way now.

OilFinder2, are you coming along to $40? That would be my last safe bet. I won't go lower, though.

But I think cutting $10 off, purely because the last remaining speculators are pulling out, is realistic. Anything lower than that would reflect demand destruction. And I'm not so sure pure demand destruction would happen with oil at $40. Since 2005, the world has learned to adapt to $40.

Could ya quantitatively define grinding to a halt?

Umm, I just searched this site for all of my posts (there aren't that many yet) and I could not find a shred of evidence that anything you have written about me is true. I suggest you tell your shrink that you are hallucinating and he will adjust your meds.

Hey congrats to OF2 and Lorenzo for their predictions. I think that its evident that if we reduce demand significantly that the price will plummet. My question is how long deflation will rule.

Will international governments pour such immense ammounts of fiat currency into the market as to arrtificially inflate the price of all assets? IN that case we could experience a near term reversal where inflation and even hyperinflation beocome the norm.

At the same time, the wheels of economic collapse seem firmly in place so my bets are on a continuing and prolonged period of deflation that no international governmental intervention will be able to turn around.

So yes to 50 $/barrel oil, yes to even the possibility of 20 $ barrel/oil.

And that means that demand destruction will prolong the time it takes before we reach a significant decline in oil production. Perhaps by as much as a decade.