| | | Ed... understood... I was referring to other previous posts of mine, not the one you replied to... no big deal...
<Using the analogy with natty>
If you carry that analogy all the way through, I suggest that with ng, the demand surges are almost always due to weather events and are quite seasonal... whereas with oil, worldwide economic growth is the "weather" that makes the big difference in demand and I see no signs that worldwide economies are perking up significantly -- the data suggests very slow/low growth for the foreseeable future.
<Hopefully we are not at the point here where, when someone wants to discuss a particular point about oil prices, they have to address all of the factors that impact oil prices.>
Not sure I understand this logic... if one wants to talk about inflation forecasts, weather forecasts, the price of gold -- whatever -- it doesn't seem useful to me to only look at one piece of the price puzzle. With oil, I would never risk my own money on any related investment without considering supply issues, depletion issues, exploration issues, geo-political issues, futures trading (contango? backwardation?), but as with the ng analogy's emphasis on weather -- I'd ALWAYS want to include demand issues as it is the single most important factor in the price of oil... all of the other issues become noise if/when demand is growing robustly, or on the other side, when demand isn't growing very fast or at all, and in this case can anyone point me to any data that suggests world economic growth is really going to take off in the next 12-18 mos?
OK, I understand your point and to simplify, perhaps one should at least consider 2 factors wrt the price of oil: demand above all else, and then supply/production.
We can disagree on all of the rest, but seems like those two factors are obviously the main drivers of the overall trend in oil, while most of the other factors may be one-time, temporary events.
Nobody saw the over-production/supply glut issue coming when oil was $100 because demand supported those prices -- until it became clear that the world was not in full blown recovery mode and demand no longer supported the production levels or price bust because of that. |
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