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Strategies & Market Trends : Natural Resource Stocks -- Ignore unavailable to you. Want to Upgrade?

To: Cactus Jack who wrote (69053)	6/19/2008 11:46:12 AM
From: JimisJim	Read Replies (1) \| Respond to of 108660

Cactus: The blame game... got this from another board a couple of days ago: The Blame Game We seem to be in a constant tug of war on why oil prices have been going up and up. On one side there is a view that demand has been growing faster than supply and the markets are at work making the two meet. On the other hand it is outside forces that are making oil prices continue to climb. Over the past 5 years we have heard that oil has gone up by $10 to $30 -- or whatever -- a barrel because of: 1) War Premium 2) Hurricanes 3) Hedge Funds 4) Speculators 5) Weak Dollar 6) Refinery Bottlenecks Since change is hard it would be comforting if it is these out side forces were at work and they were the major cause for oil price increases. If they are the cause then we will not have to make any changes in how we use energy. A change in energy use is very painful and will effect both life styles and will be very costly to make. To change how we use energy and it's sources will take a great deal of time, perhaps 20 years using history as a lesson. It would be much easier if we can blame "them" so we would not have to do anything. Since finding real information of just where supply/demand is at is extremely hard there is a great deal of fog around the oil markets. Putting the pieces together does not paint a picture that many would not like to see. What we do know is that: 1) Looking back over the last few years demand has been increasing at an average rate of about 1 1/2 million barrels a year. 2) From 2002 through about 2006 a good part of the increase demand has been meet by using up the worlds spare production capacity. 3)Starting in 2006 that spare capacity went to about 0 (there was some spare capacity in oil types that could not be refined), and some of the increases in demand were meet by eating into world inventories. 4)Starting this year the ability to draw down inventories started becoming harder, and to cut the rate of demand increases prices started spiking. 5) Looking ahead the Saudi increase in production is getting a lot of attention, but what is not said is that demand will also go up this summer by around 2 million barrels a day, and that is several times what the Saudi will increase. In addition to the 1 1/2million barrels a day increase in demand each year, as we go through the year we have demand swings of about 3 million barrels a day. We are now going from the low demand part of the year. 6) A lot of attention has been given to India and China being the big gainers in demand. While this is true, the oil producing countries (Middle East and Russia) are also increasing their demand as fast as China. When the oil producing countries increase their internal demand their is less oil available for export.

To: Cactus Jack who wrote (69053)	6/19/2008 4:26:16 PM
From: isopatch	Read Replies (1) \| Respond to of 108660

John. PPT & allied CBs know that to. And not surprisingly, it looks like they just intervened - again - in the gold market, quickly taking us from up $13 to up $3. This isn't noise on the tape. It's deception on the tape, continually trying to run stops on over leveraged futures players. One thing the two have in common is they're both very ST in duration. FWIW, methinkin' the boyz chance of containing this mess til after the election are slim and none! Iso