$50 oil?

[TonyM]

Just some food for thought; I wonder how many of the experts predicting the bottom to fall out from under crude were also calling for $100 a barrel just a few short months ago?

Also, does anyone find it strange that the President of OPEC (the Nigerian minister) is calling on his fellow partners to cut production and N.Korea plans nuclear tests, U.S threatens U.N sanctions (they must be laughing their asses off in N. Korea and Iran)...ho hum, not interested. These two news items alone would have very likely spiked crude prices just a month and half ago. It's seems more weight is given to positive news than negative news lately.

Just some miscelleanous ramblings while I'm patching up my ass after today's bloodbath, plenty of time to ponder my decision not to take the 10% loss last Friday. I think November brings some change; earnings, colder weather, end of elections, more refineries closing for maintenance (or so they claim;) ), etc, etc.

[stck8ter]

These two news items alone would have very likely spiked crude prices just a month and half ago. It's seems more weight is given to positive news than negative news lately.


I believe the exodus of hedge fund monies from the oil and oil stocks lowers the volatility and brings more focus to the essentials of the present instead of the possible dangers, ie that there is currently more oil/gas in storage than currently needed in the short term.

and that the republicans need help in the coming midterm elections !

ha!

[forumposters]

If N. Korea goes through with their Nuclear Test, we're going to see $100 oil. But, whether not N. Korea will do that is anybody's guess.

[Lou]

I think what N Korea does will have very little effect on oil prices. They will test underground - its not like they are going to fire missiles near Japan. Its supply and demand and I agree with hedge funds backing out. You need to worry more about production being cut. I love how Kuwait is now discussing reducing production - didnt we save that country from Sadam? Love my tax dollars at work Sr Bush...

[TonyM]

I don't think N. Korea's testing will have much impact unless there is already a geopolitical fear catalyst in motion, then it could affect price as a fear based on the end of the world media hype. Now if they successfully test and then Ahminadinajahd (sp?) visits them shortly after, that could cause quite a stir.

I think OPEC is trying to hold prices in the least alarming manner possible, with the individual nations announcing their own cuts one by one until the desired price is maintained. Or perhaps the Saudi's do not want to appear anti-American or even anti-GOP and when they do announce cuts it will be blamed on pressure from the others? It is quite interesting to see the timely announcements and then the odd refinery problem pops up. I still think sometime in November will be when we find out if crude can really be driven lower or if it takes off to the high $60's again. Thinking back to the end of August when CNN Money called for $2 a gallon gas by Thanksgiving from $3 at the time, how do you make that call? It almost seems like an agreed upon target price, due to the rapidity with which the decline took place. This remarkable run up and pullback in crude has been a good learning experience for future trades.

[Lou]

its could be a great entry point for oil stocks soon if they fall much further

[TonyM]

Until Opec officially backs the 1 million bpd cut, it's going to be a bit risky to buy an oil stock. If they do not follow through with the speculation then crude will probably drop several dollars in a single trading day and oil stocks would likley see their biggest pullback yet. Obviously Opec realizes this and has pretty much been backed into a corner by the unofficial statements from people within their organization, which is likely why those people said what they did. I think they have no choice unless they are willing to gamble on the UN bringing sanctions against Iran, that situation while not prominent in the media lately, is still there and will be dealt with at some point.

On that subject, the UN has unwittingly put itself in a bad situation; if they do not follow through with the resolution passed on Iran and nuclear development, they have to know that N. Korea will take that as weakness and follow the same path.

I think it all comes to a head in November, our own Energy secretary really put his foot in his mouth imo when he said that he would be calling Opec to let them know that Washington would not be happy with a cut and resultant higher gas prices. Sounds to me that he is implying that U.S. policymakers have the clout to influence Opec's production decisions. So who besides Joe Consumer is going to care if oil is higher after 11/7 ?