$20 per barrel oil in 2009

[leonleon]

Sana magkatotoo.

http://www.bloomberg.com/apps/news?p...d=aQBXqFcd5gJo

[CVT]

Bro., "it" is free.....

8303:dishwash:

[Zeus]

Magkano kayo isang litro ng gasolina kung ganun?

[tidus1203]

Hahaha IMO not possible until oil does not become mainstream source of energy. As long as most people DO NOT use oil anymore to heat up their homes, power their cars then yeah $20 and even lower is possible. But by then you wouldn't care cause you're probably not using oil anymore kaya nga bumagsak ng ganun. And higher oil prices is MANDATORY for a healthy economy. LOWER oil prices just means lower demand (remember supply does not increase in fact it decreases over time since oil is finite).

[a3n3as]

Magkano kayo isang litro ng gasolina kung ganun?

Knowing the big 3 business practice here, siguro piso lang ang rollback nila.

[uls]

read carefully

July 16 (Bloomberg) -- Crude oil will collapse to $20 a barrel this year as the recession takes a deeper toll on fuel demand, according to academic and former U.S. government adviser Philip Verleger.

A crude surplus of 100 million barrels will accumulate by the end of the year, straining global storage capacity and sending prices to a seven-year low, said Verleger, who correctly predicted in 2007 that prices were set to exceed $100. Supply is outpacing demand by about 1 million barrels a day, he said.

“The economic situation is not getting better,” Verleger, 64, a professor at the University of Calgary and head of consultant PKVerleger LLC, said in a telephone interview yesterday. “Global refinery runs are going to be much lower in the fall. If the recession continues and it’s a warm winter, it’s going to be devastating.”

Crude oil last traded at $20 a barrel in February 2002. Futures were at $61.18 today in New York, having recovered 89 percent from a four-year low reached last December. The Organization of Petroleum Exporting Countries is implementing record supply cuts announced last year in response to plunging consumption.

“OPEC don’t realize the magnitude of the cuts they need to make,” which would total about a further 2 million barrels a day, Verleger added. “Storage is going to become tight. It’s not clear if there’s going to be enough storage available.”

notice that he just focused on supply and demand fundamentals

he totally left out casino betting and inflation hedging by market players who are not commercial users of oil (those fundies)

it's obvious to anyone who has been following the markets that supply and demand is not the only factor that affects oil price

he didnt even mention how the value of the USD strongly affects oil price

[tidus1203]

Well even without factoring speculative trades and value of the USD, oil at $20 is not possible even in the current demand-supply dynamics. Of course everyone is entitled to their beliefs but I seriously think he is mistaken.

[loidch]

di ba they will start prosecuting the futures player responsible for the abnormal rise of oil last month? these are wise guys who milks the market in these times just like what short sellers do.

but what if gas costs 16 pesos per liter and diesel cost 13 pesos now? would you guys just drive around coz fuel is cheap? does it mean more and more people are spending for gas just to joyride?

there are lots of docked ships being used as storage bins for fuel. hedge fundies makes suckers look good but in the end they just die a little later than most of their hosts.

today the media moguls are again painting a rosy picture that the world has seen the worst, i pity those suckers.....70 bucks or 20 bucks a barrel? what difference does it make?

[tidus1203]

Hahaha its funny how people brand market speculators and short sellers as EVIL. Short sellers add liquidity to the market place. Just as anyone is free to profit from the upside, anyone should also be free to profit from the downside. That is the free markets! WHen things go abnormally high (for stocks) or abnormally low (for commodities) no one complains, all is fine. Pero when the reverse happens because of the excesses everyone becomes crybabies. Buti di ako ganun. I like to live the times. Pag umaakyat I am hoping I am long if bumababa I am hoping I am short.

[uls]

di ba they will start prosecuting the futures player responsible for the abnormal rise of oil last month? these are wise guys who milks the market in these times just like what short sellers do.

no, not prosecute, nobody's going to jail

sisitahin lang sila

the USG will just limit the number of contacts they are allowed to hold

[leonleon]

Magkano kayo isang litro ng gasolina kung ganun?

According to the article, the last time OIL was trading at USD 20.00 / barrel was in Feb. of 2002.

If I remember correctly, the price of unleaded gasoline (Caltex VORTEX Gold, specifically) then in the Phils. was only P 16.00 per liter give or take a few centavos, with a prevailing USD to Peso exchange rate of USD 1.00 to P 52.00.

[leonleon]

read carefully



notice that he just focused on supply and demand fundamentals

he totally left out casino betting and inflation hedging by market players who are not commercial users of oil (those fundies)

it's obvious to anyone who has been following the markets that supply and demand is not the only factor that affects oil price

he didnt even mention how the value of the USD strongly affects oil price

From the article:

"...said Verleger, who correctly predicted in 2007 that prices were set to exceed $100"

But he did correctly predict that it will exceed USD 100.00 back then. So won't he be using the same "techniques" he used in 2007 to make this new prediction?

[tidus1203]

Yeah the media always like to sensationalize things, this article included. There is a very popular saying in the financial market industry and it goes like this... "Past performance does not guarantee future results". So does not mean he was right before he will be right again. Peter Schiff predicted it, Jim Rogers predicted it but hell these two guys would laugh out at the idea of $20 oil barring its no longer the energy commodity of choice.

[uls]

From the article:

"...said Verleger, who correctly predicted in 2007 that prices were set to exceed $100"

But he did correctly predict that it will exceed USD 100.00 back then. So won't he be using the same "techniques" he used in 2007 to make this new prediction?

anyone who followed oil price back in 2007 knew it would go above $100

for oil price to drop to $20 per barrel this year, the USD should strengthen substantially.

the USD index should rise above its March peak



when the USD index was at its peak in March, oil was 40+ dollars per barrel



do you remember what it was like back in March?

the market was expecting Armageddon

everyone was scared to death

everyone dumped stocks and commodities and went to cash and treasuries

so for oil to drop to $20, something big has to scare the hell out of market again

something like the failure of a major financial institution (like Citigroup)

will the USG allow something like that to happen?

unlikely

[tidus1203]

Hey uls pansin mo yung USD index chart parang double top ata yan ah... Ngayon ko lang napansin when you posted the chart. Hehehehe double top is a bearish sign, looks like USD has more to fall in the coming months.

[innoBOB[09JmtG]]

mas maganada sana kung 20 etot per liter...

sarap mag drive nun

[CVT]

Keep the faith, bro.... :hysterical:

8303:dishwash:

[uls]

Hey uls pansin mo yung USD index chart parang double top ata yan ah... Ngayon ko lang napansin when you posted the chart. Hehehehe double top is a bearish sign, looks like USD has more to fall in the coming months.

yep pansin ko

the first top was after Lehman (when the financial system almost collapsed so everyone went into safe haven USD cash and UST)

then remember in december 2008 the market turned bullish?

the USD was sold off in favor of risk assets

then pag pasok ng 2009 nagkaroon ng fear na babagsak ang Citigroup

that's the second top (takbo uli sa USD cash and treasuries)

now that the USG/Fed has bailed out and backstopped everything in sight, there's no longer concern for Armageddon

so there's less demand for USD... which is bearish for USD

which is bullish for oil

[uls]

i'm not saying $20 oil is totally impossible this year

anything's possible

what i'm saying is that for oil to drop to $20, it has to take more than fundamentals (low demand, high inventory, large number of floating storage)

oil (as an asset) is a risk bet

it is a bet on inflation

oil is a hedge against the falling USD

oil price moves opposite the USD

for oil price to drop to $20, some event has to drive the USD upwards substantially

[tidus1203]

Pero I am betting HERE (you can quote me) that $20 is NOT POSSIBLE.