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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: mishedlo who wrote (74273)11/17/2006 5:16:37 PM
From: bond_bubble  Read Replies (1) of 110194
 
Stocks rose because the liquidity was increasing in those periods. Oil rose from 20 to 80 because liquidity was increasing. Liquidity is continuing to increase. Hence stocks are continuing to increase. Oil is falling inspite of its demand increase. You are talking as if sharp fall in oil prices is caused by demand fall!! I used to post 6 months ago that oil price increase is purely due to speculation and hoarding. Almost everyone on this board said, it is peak oil and demand and shit like that (see my link on hoarding in the end. my link on speculation is not retrievable from SI board). For now, the speculation has been restrained (may be because the speculators see excess inventory). But, you are already seeing Canadian oil sands companies are starting to sell their lands!! For them, oil extraction from oil sands is becoming unprofitable (oil has to be above $60, incorporating the increase in project cost). Most of the oil companies are putting off projects to bring additional oil in the future. Thus marginal producers are being shut off. But demand continues to be strong and increasing. The liquidity is strong. I will bet again that oil price will INCREASE because of speculation as the additional demand soaks up the excess inventory while at the same time marginal producers shut down their projects!!

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