Anyone "Stuffing their own Xmas Stockings'' today ?
I am; SCSWF & PGO (yes ! @ $12 1/2) and laid out a limit buy if FLC hits a new low... sub $ 8
The reason the shorts are so confident here (and rightfully so) is that they know there are no large block Institutional buyers out there through the end of the month ie: tax loss selling by the funds - wash sale rules etc. We had a big, big obvious tax loss selloff on the last day of November, so come Jan 1st the buyers will be back imho.
Fadel Gheit is losing my respect now... just on CNBC; he didn't even make sense... Since when in a simple supply & demand commodity equation has lowering the supply (to bring it both in-line with demand and to draw off excess supply) not made a difference. Did he really say that further OPEC cuts would do nothing ? Is he getting senile, or is he now in lockstep with the official Street ''spin'' ? These guys are stammering and spitting all over themselves with double-speak now... Anyone who thinks that when; not if; we bomb Iraq's oil facilities - will not be a positive factor in crude pricing is an idiot imho.
What is gong on here ? EIA #'s don't wash, Congres has asked for an inquiry. No one wants to use the over-supply numbers correctly; in that as a percentage of ''use'' they are NOT much at all above historic levels... Anyone remember XTO's CEO Simpson's statistic's on the totally misconstrued supply numbers ? Never do I recall such a ''spin job'' done with so little vociferous protest ! These numbers and Simpson's quote says it all imho; a historical look at the excess supply in historic terms:
''We believe the current, much publicized 'glut' of oil has been grossly overstated. Our country's increasing vulnerability to supply disruptions as the world's largest oil importer is being viewed with total complacency,'' Simpson added. ''This vulnerability is tabulated below by reviewing historical levels of U.S. crude oil inventories represented as a number of days of U.S. consumption:
Keyword here - is ''days of supply''
Days of Supply
Years In Inventory
1981 - 1985 29.1
1986 - 1990 26.1
1991 - 1995 24.7
July 1996 22.9
July 1997 22.7
July 1998 23.6
''U.S. inventories of crude oil as reported by the API on Tuesday of this week were 341 million barrels versus 323 million barrels a year ago, an increase of 18 million barrels. While days supply in 1998 are slightly higher than 1996 and 1997 levels, the days supply is one of the lowest in the past 20 years. Furthermore, the cuts proposed by OPEC and other nations, if fully implemented, are in excess of one billion barrels annually. Although all of this reduction will not directly affect U.S. inventories, the 18 million barrel increase is dwarfed by any measure.''
In conclusion, Simpson stated, ''Our analysis leads us to believe that, if most of the recently announced cuts are actually implemented, this current 'oil is running out our ears' market psychology could well be replaced with shortage concerns ...>>
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techstocks.com
per the above we have a total supply of 335 million barrels of crude in the US storage system; we used 18.6 million barrels in November; which means the 335 Million brls is roughly 18.01 days of use in storage. So where's the beef ? There is absolutely no excessive ''days of use'' supply level in the US.
What happens when the US decides to buy say $100 Million Dollars of Oil for The Strategic Petroleum Reserves ( maybe 8 million brls) ? What happens when we do take out Saddams Oil capacity - as it is logical to take out his financing ability; as Oil is his cash... What happens when we hear of the first solid signs of Asian recovery ? Well now the warnings of the pending ''rubber-band'' snap back in Crude as warned by the wise old Sages of the Oilpatch seems to not only be ominous, but entirely predictable. The adage that $10 crude will also bring $25-$30 crude has not been lost on me... Kind of understand why ole Rainwater has been buying Crude futures here. |
