/dev/null Posted March 8, 2011 Share Posted March 8, 2011 We have to start somewhere. I read a quote from John Kerry the other day from April 2001. When asked about opening up more land for drilling he said something like "it'll take ten years before that oil will ever hit the market". Time flies. So if we opened up those fields Kerry spoke of, it'd be hitting the markets right about now. Plan ahead. Never! Link to comment Share on other sites More sharing options...
TPS Posted March 8, 2011 Share Posted March 8, 2011 Isn't this the time of year when they have to shut down capacity to clean equipment in anticipation of the summer blends? Just sayin'...again...annually... The inventory build-up relates to the profits that can be made when the futures markets are in Contango. If the futures price is > the spot + cost of carry, then "players" can make an easy profit through buying spot and selling futures. This is why you read stories about JPMorgan leasing tankers, buying oil spot and selling futures. Link to comment Share on other sites More sharing options...
whateverdude Posted March 8, 2011 Share Posted March 8, 2011 probably would have a one day $2-3 dollar effect on the news of opening up more land for drilling and then would have a much larger 4-10 year tangible impact on more supplies hitting the market. I'm not going to argue with you on how you came to your valuations because I think you have done your homework and I have not. That being said the psychology play here has got to be good for a large multiple on the real valuation. Link to comment Share on other sites More sharing options...
TPS Posted March 8, 2011 Share Posted March 8, 2011 This really is an easy fix. Most of the rise in oil is all about perception and speculation in the oil market. Make plans to open up the reserve and start making noise about tripling the oil drilling permits with talk of "environmental sound" drilling methods for oil extraction in area that are off limits now. You don't even have to follow through with it. Or the Saudis say they will make up for any disruptions...unless of course they are the next shoe to fall....which is what all of the fuss is about. That said, retailers do take advantage of the rapid swings. They are quick to adjust up, earning higher profits on their current inventory, and slow to adjust down. Link to comment Share on other sites More sharing options...
3rdnlng Posted March 8, 2011 Author Share Posted March 8, 2011 probably would have a one day $2-3 dollar effect on the news of opening up more land for drilling and then would have a much larger 4-10 year tangible impact on more supplies hitting the market. http://news.yahoo.com/s/nm/20110308/bs_nm/us_markets_oil Not disputing what you say at all, especially posting the above link. If we ever made a serious attempt to become energy independent the affect of that 12,000,000 barrels would be enormous. Link to comment Share on other sites More sharing options...
whateverdude Posted March 8, 2011 Share Posted March 8, 2011 Or the Saudis say they will make up for any disruptions...unless of course they are the next shoe to fall PEAK OIL!! what if they can not make up for any disruptions and they are just bluffing. Link to comment Share on other sites More sharing options...
whateverdude Posted March 8, 2011 Share Posted March 8, 2011 (edited) http://news.yahoo.com/s/nm/20110308/bs_nm/us_markets_oil Not disputing what you say at all, especially posting the above link. If we ever made a serious attempt to become energy independent the affect of that 12,000,000 barrels would be enormous. Right now the US consumes about 21 millions barrels of oil a day. 12 millions barrels a day would get us about half way there. World oil demand is projected to increase by about 40% by 2030, 85 mil. barrels to 119 mill barrels a day. Supply will not keep up with demand, we need to get off oil. Also oil is priced on a global market so even if all the oil we get is from the US we will still pay a higher price. Then factor in the dollar losing it's reserve status....we are !@#$'ed if we stay with oil Edited March 8, 2011 by whateverdude Link to comment Share on other sites More sharing options...
erynthered Posted March 8, 2011 Share Posted March 8, 2011 So if we opened up those fields Kerry spoke of, it'd be hitting the markets right about now. Plan ahead. Never! Forward thinking? Naaaaaaaaaaaaaa Link to comment Share on other sites More sharing options...
ExiledInIllinois Posted March 8, 2011 Share Posted March 8, 2011 (edited) Here is a thought... Maybe not the right thread. What if the people of Saudi Arabia decide to go the route like the others in the region are doing? One can only dream, can't they? Edited March 8, 2011 by ExiledInIllinois Link to comment Share on other sites More sharing options...
TPS Posted March 9, 2011 Share Posted March 9, 2011 PEAK OIL!! what if they can not make up for any disruptions and they are just bluffing. I don't buy the "just bluffing" argument. They have more than enough to react to any short term dislocations, if they choose. Hmmm...peak oil...As price increases, it brings more expensive sources into play. If memory serves, I think the discovery off the coast of Brazil is supposed to be one of the largest sources in existent, and has yet to be tapped. Who knows what else lies around the globe? Link to comment Share on other sites More sharing options...
Magox Posted March 9, 2011 Share Posted March 9, 2011 I don't buy the "just bluffing" argument. They have more than enough to react to any short term dislocations, if they choose. Hmmm...peak oil...As price increases, it brings more expensive sources into play. If memory serves, I think the discovery off the coast of Brazil is supposed to be one of the largest sources in existent, and has yet to be tapped. Who knows what else lies around the globe? That wont come online for at least another 7-10 years as the drilling is in extremely deep waters. However you do make a point that as the higher the price of oil reaches the more available other existing oil deposits are extracted such as Canadian sands. In regards to Saudi Oil, who knows what they have? Matthew Simmons use to have all sorts of studies and satellite imagery that he would present making his "peak oil" case, of course the guys from Saudi Aramco emphatically deny it, so the reality is that none of us are qualified to give a credible opinion on the matter, and either are most traders and oil analysts. Link to comment Share on other sites More sharing options...
3rdnlng Posted March 9, 2011 Author Share Posted March 9, 2011 Right now the US consumes about 21 millions barrels of oil a day. 12 millions barrels a day would get us about half way there. World oil demand is projected to increase by about 40% by 2030, 85 mil. barrels to 119 mill barrels a day. Supply will not keep up with demand, we need to get off oil. Also oil is priced on a global market so even if all the oil we get is from the US we will still pay a higher price. Then factor in the dollar losing it's reserve status....we are !@#$'ed if we stay with oil We already produce about 9 million barrels a day. Another 12 million would keep up with today's needs. Increasing the world's supply by 15% or so would definately have an affect on the price of oil. I don't disagree with you regarding alternate energy sources, but let's use what we have and work on perfecting the Volt. Link to comment Share on other sites More sharing options...
whateverdude Posted March 9, 2011 Share Posted March 9, 2011 Some investors see trouble. They are buying oil options contracts for $150 and $200 a barrel with expiry dates late this year, either as a bet or as an insurance against Mid-East mayhem. geesh WTF! Link to comment Share on other sites More sharing options...
Magox Posted March 9, 2011 Share Posted March 9, 2011 geesh WTF! Great insurance hedge to buy $150 options. I'd say the likelyhood of it happening are lower than 25%, but if it did reach that high, then you better believe that the stock market would take a serious nosedive and depending on the options you own, you could really protect your downside with those options. Link to comment Share on other sites More sharing options...
whateverdude Posted March 9, 2011 Share Posted March 9, 2011 Great insurance hedge to buy $150 options. I'd say the likelyhood of it happening are lower than 25%, but if it did reach that high, then you better believe that the stock market would take a serious nosedive and depending on the options you own, you could really protect your downside with those options. This is the big table Vegas side of investing that I little understand and don't have the stomach for, but for those willing to take that kind of risk the payoff could be big. Link to comment Share on other sites More sharing options...
Jim in Anchorage Posted March 9, 2011 Share Posted March 9, 2011 (edited) Great insurance hedge to buy $150 options. I'd say the likelyhood of it happening are lower than 25%, but if it did reach that high, then you better believe that the stock market would take a serious nosedive and depending on the options you own, you could really protect your downside with those options. If the odds are less than 25% would it not be better to be selling $150 options? Edited March 9, 2011 by Jim in Anchorage Link to comment Share on other sites More sharing options...
DC Tom Posted March 10, 2011 Share Posted March 10, 2011 If the odds are less than 25% would it not be better to be selling $150 options? Not as a hedge. Link to comment Share on other sites More sharing options...
Magox Posted March 10, 2011 Share Posted March 10, 2011 If the odds are less than 25% would it not be better to be selling $150 options? Hedge, Hedge, Hedge! This is the big table Vegas side of investing that I little understand and don't have the stomach for, but for those willing to take that kind of risk the payoff could be big. And this wouldn't be classified as a speculative "Big table Vegas" sort of investment. I'm talking purely about insurance (hedging), to help protect your investments in equities. A $150 option would be pretty expensive, and I havent checked lately I'm guessing the $200 option has risen dramatically in value over the last few weeks. I wouldnt be surprised that the option value on a Dec. 2011 option has risen over 500% in that time span. Those option premiums can fly when this sort of panic buying comes into the market. Link to comment Share on other sites More sharing options...
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