The coming US dollar crisis Message Board

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Strategies & Market Trends : The coming US dollar crisis

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To: Real Man who wrote (21818)	8/6/2009 8:56:33 AM
From: axial	Read Replies (1) of 71479

Sorry Vi, not so. Depends where, but for instance one oil sands producer has costs of $37/barrel. That's oil sands, not pumping. Lots of producers are making money now. At $50, they're still making money. Even OPEC has stated that they don't need to make cuts at this price. VLCC rates have plunged. Refineries are closing, and runs being cut to increase spreads. New refinery builds are being cancelled. Inventories are at seasonal highs and growing. "Total US commercial crude stocks increased 1.67 million barrels to 349.51 million barrels, which were 32.518 million barrels more than the five-year average and 52.647 million barrels more than year-ago levels as weak demand has reduced refiner appetite for barrels." arabianoilandgas.com Large amounts of distillates and unfinished crude stored in offshore storage, here and in Europe. "“Refiners have to reduce runs because there is plenty of product and that puts pressure on prices,” said Ken Hasegawa, a commodity derivative sales manager at brokers Newedge in Tokyo. “This market is nearly close to a top.” bloomberg.com Demand decline has been ~8%. --- The $70 marginal cost is for new production. There's excess production at prices far lower than $70 - but no market for the crude. Not yet. Demand return will be slow... this recession isn't gonna end soon. "Green shoots" won't do it. Jim

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