⌐ AV8OR WANNABE

I think OPEC bears a huge responsibility for our current economical malaise - in effect they forced an already weak economy to tailspin into a recession. Therefore I'd love if we could help all OPEC countries (plus Russia) to tailspin into a bankruptcy of their own. The more they hurt the more I celebrate.

I read the other day that the Russian government postponed a recent mass-order of their 'new' fighter jets (Mig 35s?) due to the slump of oil prices.
YEAY!!!

We should impose an 'enemy-tax' on gas right now since it's getting cheap and use the extra proceeding to subsidize any and all alternative energy production. I know it's against the market economy principles which I usually espouse however, our goal should be to end oil purchases from the Middle East and Venezuela in 10 years or less (which will lower oil demand and thus oil prices worldwide) ...and I'm willing to pay a little extra for that...

OPEC is an economical terrorist organization and should be treated as such.

An example of how high oil prices help our enemes...

Russia offers fighter jets to Lebanon as gifts | World news | The Guardian

⌐ AV8OR WANNABE

I'm at Big Brown and when CAL hedged at $140 I, along with many of my friends here, thought they were being smart since the oil seemed to be going up by the hour... Fortunately, just like you said, they hedged a very small portion of their oil usage at that price.

CAL IS a great company and I'm sure they have a bright future...

ryan1234

Dude, do you even know how futures trading works... and "oil speculation"... and spots? What exactly is speculation on the commodities market? If you study it a little more deeply, I think you'll be suprised.

All of these airlines blaming the "evil speculators" flipping futures.... what about the "speculators" driving prices artificially low? Do they actually do that?

The market is so volatile that now even the smartest "experts" can predict what will happen. The Fed and the liquidity has thrown the whole thing out of whack, combine that to MZM, CPI, and plain ole' credit in every shape and form... and it is not easy to figure how it will all work out, much less how a single commodity will go.

BoeingTanker

Just to clarify, today is one of those wierd trading days since this was the last day of trading on the January 2009 oil contracts, when the market opens on Monday they will be reporting the February contracts. They always quote the next closing contract, even though there IS trading going on on Feb, Mar and April oil at the same time. At the close today while January oil was down to something like $32 or $33, the Feb contract closed at $ 42.94, up $ 1.27. If you look at prices late in November you see the same thing happen because the December contract was lower than the January, so it popped up. . . for a short time, then continued down.

So, if I understand it right (and I may not), Monday AM we will see oil start out somewhere near that $ 42.94 level and move from there, depending on where the traders feel it should go. If they feel the economy will start to improve it may hold that price or go higher, if they feel that bottom/recovery is still a ways off, look out below.

Markets are strange and hard to follow unless you live them, maybe thats why people like Madoff can get away with the garbage they do. . . for a while anyway.

We, my friends are all just along for the ride.

BoeingTanker

You bet they do, and we MAY even be seeing that now. Remember these traders just look for any angle to make the quick buck. If they are right they are heros at their firm or hedge fund. If they are wrong. . . .

I personally know people who are long a stock or commodity one day and short it the next just depending on a move the day before or an announcement/news story about that stock or commodity. It drives me nuts that they can flip so quickly, but it's how they trade. And yes a couple of them have been burned BAD since July on oil. Now they are scrambling to make up the losses.

Take out Stocks or Commodities and replace with Poker, Craps or Blackjack and you'd say they have a gambling problem. . . and I wouldn't argue with you.

ryan1234

The thing with futures.. is that it is a futures contract generally never takes delivery (well...when they are flipped) of whatever the contract was for (i.e. 1000 barrels) by the date specified. Basically it is someone betting either way oil prices will go... and recently there are almost the same percentage of shorts and longs...prior to July, futures contracts actually went down while oil was going up... according to NYMEX. Futures is also a two way street.... depending on the spot the person taking the bet can loose big. Just because they took the contract at a higher value doesn't mean the contract will increase in value and further drive the price up (as seen by the oil price waterfall) - Spot prices work a little different. U.S. monetary policy had more to do with high oil prices than futures contracts.

Everyone just needed someone to blame for the high prices. Airlines joined the party, telling Congress that only airlines should be able to hedge fuel. They wanted to make money, but they didn't want anyone else to make money. Congress wanted someone to blame... the "speculators" fit the bill perfectly - even thought half of Congress doesn't have the slightest clue about economics. (If they did, fiscal policy, GSE's, etc would be a little different)

The real problem now, unlike July, is that traders are actually TAKING delivery and "hoarding" oil. EIA estimates that oil inventories are up 9% now from September. Some ships are just sitting around with quite a bit of oil. My guess is that oil will indeed go up as the government introduces more liquidity... even that depends on several factors.

DYNASTY HVY

I,ll play along with this -oil at 55 by april
I,m wondering what kind of energy policy will be put in place within the next 18 months.
Any thought's on this ?
We were informed that drilling off the coast was now good to go, but we all know that was a complete farbication don't we ?

⌐ AV8OR WANNABE

Wow, that is so true!

socal swede

Oil will stay low until demand goes up, that will take years,,the wheels are grinding to a halt worldwide and there is nothing the opec and other oil producing nations can do. If they try to raise the cost of oil, demand will fall even further as more airlines and transportation over all declines.

most unemployed people don't drive much, right.

As long as we are stuck on stupid living beyond our means and lifting the carpet to hide problems we don't want to deal with as a nation we will not see anything get better. Greed, corporate scams and govt waste is to blame for a lot of this, but we need to start giving a turd and elect people that will do the right thing. Most people don't even know who runs your city govt, let alone the nation.

Just wait until next year when we get the commercial real estate bust as stores, businesses and offices close and there is another 3-4 million unemployed and all states and the government are out of money maybe they finally have to deal with the issues.

⌐ AV8OR WANNABE

That's very doom & gloomish - you need to get out in the sun prompto - too much depression over there in scandihoovia! (and apparently in SoCal too)

As bad as the economy seems to be right now this is the first time ever where the central banks of the world have cooperated on such a grand scale, super low interests rates all over the world (almost zero here) and numerous "bailout" or as some call it "growth promoting" programs in different countries (including the Saab & Volvo prop-up program in SE) means things will turn around way sooner than most people believe.

Not to mention the fact all recessions are driven by fear and of course our news media keeps screaming fire in this "theater".
However, without turning this thread into a political fight, as soon as the darling of the news media takes office you'll see a significant shift in the "mood" of the reporters and all of a sudden things will appear to level off and improve before you know it.

That of course will ease the fear felt around the country and before you know it they'll announce that our new messiah has lifted the country out of recession by simply being The One. Note, this is not an attack on BO but rather on the incredibly biased news media we have and how their slanted reporting influences our behavior.