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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: bart13 who wrote (88533)	11/6/2007 3:46:57 PM
From: Joe Stocks	of 110194

>>My actual opinion is that most of the increases up to about 2006 were mostly inflation and "catch up", and since then have been more "peak oil" and supply & demand based<< I agree. As far as current prices supply and demand has been some what turned on it's head.... The current crude price has little to nothing to do with now available oil. Right now Jan oil is cheaper than Dec.. Feb is cheaper than Feb. With high prices, those that need to buy oil for storage are waiting for lower prices as the backwardization in crude prices would indicate. Problem is that oil held up during seasonally weak period this year. Those storing oil did not fill their tanks waiting for cheaper oil. Therefor stored inventories have gone down while empty tankers sit in the mideast waiting for someone to buy. In the mean time low inventories have kept spot prices high. Those short current DEc contracts may be forced to buy at the higher prices, keeping prices yet higher while inventories go lower. Of course peak oil is another factor, but in my opinion is not the problem here in the very short term. The dollar if much more of a factor and will also keep a bid under crude prices.

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