Peak Oil News and Message Boards

mefistofeles wrote:For some reason we had build ups of diesel inventory here in the US, yet other countries at least Saudi Arabia and Iran seem to be running into shortages.

heroineworshipper wrote:China did shut down half its gasoline consumption for the olympics. You can't say that in the media because it might slow down advertising sales.

barbara23 wrote:Hi guys! It seems that Oil will be falling these days and probably we will see a barrel for less than $100, just like a year ago.
Oil fell below $120 a barrel , for the first time after May on Monday, as new data showed that consumers are slowing down their consumption of energy to curb high inflation costs. The Federal Reserve's meeting on Tuesday also cause some anxious moments for investors who may be expecting a rise in borrowing rates to curb inflation, but analysts feel that it may not be an option.

US crude for September delivery fell $3.69 to settle at $121.41 a barrel on the New York Mercantile Exchange.
Cheers!
Barbie

jackal42 wrote:Something to do with the Olympics?

Lanthanide wrote:

jackal42 wrote:Something to do with the Olympics?

I had been idley wondering for a few months now if the ramp up towards $147 was contributed to by the Olympics and all of the construction etc that China was putting into it (and stockpiling fuel to ensure the electricity would go out, etc). Any ideas? Or is even the Olympics too small of an individual event to make an impact on world markets?

Mon Jul 28, 2008 9:10 pm Post subject: Re: So why did the price of oil drop $20?

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Cashmere wrote:
Disagree wholeheartedly that a 20$ drop is a sign of "demand destruction," particularly given the dramatic run up.

This is a sign that the market moved too quickly.


The price spike before the drop of $20 also had much to do with SemGroup.

There appears to be a strong possibility that their traders who bet on falling prices did not follow company trading guidelines. When the loss was discovered, the short positions had to be closed out, driving up the price to a level we now call a price spike.

This has almost nothing to do with long term supply/demand. So far in 2008, net oil + product imports are dropping faster than 'demand destruction'. Demand destruction is just another (erroneous) way of saying that demand must drop somehow to available levels of supply.

heroineworshipper wrote:China did shut down half its gasoline consumption for the olympics. You can't say that in the media because it might slow down advertising sales.

On the price run-up to $147 - this was probably caused by buying of futures contracts by SemGroup. Sem had bet on prices to fall and was forced to close out losing positions by buying at higher prices:

Forney2008 wrote:

On the price run-up to $147 - this was probably caused by buying of futures contracts by SemGroup. Sem had bet on prices to fall and was forced to close out losing positions by buying at higher prices:

So basically what Semgroup caused was noise in the charts, and now oil has fallen to what it would have otherwise been without Semgroup's effect on futures market, Correct? Cause I remember one day a month or so ago, oil surged like 12 and then fell like 8 dollars just as quickly. Semgroup had to get skull-f*cked if they bet wrong on trades like that.

nobodypanic wrote:so in other words speculation does affect the price of oil?

Producers scramble to lock in oil prices
By Javier Blas in London

Published: August 5 2008 21:31 | Last updated: August 5 2008 21:31

Crude oil and natural gas producers are scrambling to “lock in” prices by buying insurance against further drops in prices, as oil on Tuesday hit a fresh three-month low of $118 a barrel.

Traders said strong buying of put options – contracts that give holders the right to sell crude oil at a predetermined price and date – might be exacerbating the fall in oil prices. The options’ originators, such as Wall Street banks, need to sell futures – pushing down prices – to hedge their option positions.

The number of financial bets providing insurance against a fall in prices below $100 a barrel before the end of the year has more than doubled in the past six weeks, according to the New York Mercantile Exchange.