Crude Oil

[Tok3n]

Luv these drama queen articles that always come out during hurricane season

http://money.cnn.com/2007/09/14/news...ion=2007091414

[Mick100]

Commercial (hedgers) net shorts positions
7/08/07 net short 117500
14/08/07 net short 85700
21/08/07 net short 42600
28/08/07 net short 25000
4/09/07 net short 34500
11/09/07 net short 36000

Basiccally no change in net short positions this week with commercials adding 7000 short and 5800 long. Should see crude push through $80 next week
The fact that commercials are not significantly increasing short positions on a strengthening oil price is very bullish - short term
The question is - how high is it going to go

[tricha]

Mick100 "Basiccally no change in net short positions this week with commercials adding 7000 short and 5800 long. Should see crude push through $80 next week
The fact that commercials are not significantly increasing short positions on a strengthening oil price is very bullish - short term
The question is - how high is it going to go"

Hey Mick do you still hold the penny dreadful

Judgement day coming soon for most of my oil portfilio.

ARQ and Emerald Oil @ Gas with the Valentine drill reaching target most likely today.

Drillsearch spudding Marina in the Bonaparte in a day or 3.

Northwest energy on the verge of earnings.

Great Artesian Oil & Gas to have new wells drilled soon.

NZO earning from Tui , new drill results very disappointing though.

[Mick100]

Yeah tricha still hold three penny oilers - DLS, NWE, NDO
Looking forward to NDO finnally developing galoc oilfield, NWE collecting their royalties from puffin, and the exploration drilling this yr and next yr with DLS

[digger]

Commercial (hedgers) net shorts positions
7/08/07 net short 117500
14/08/07 net short 85700
21/08/07 net short 42600
28/08/07 net short 25000
4/09/07 net short 34500
11/09/07 net short 36000

Basiccally no change in net short positions this week with commercials adding 7000 short and 5800 long. Should see crude push through $80 next week
The fact that commercials are not significantly increasing short positions on a strengthening oil price is very bullish - short term
The question is - how high is it going to go

Mike100,thanks for posting these GOT reports. They seem to be reasonably accurate at indicating future prices.Has any survey been done over time on just how good these commerical short positions are for given future prices?

[Heavy Metal]

Seems like an increasing number of analysts are sounding alarms in oil at current prices since there is no fundamental reasons supporting oil's recent rally. Only a short term drop in US oil inventories and speculative buying is propping up the price at the moment. As I've said before, oil reaches a cyclical annual peak around now.... back to $60 by Xmas?

http://biz.yahoo.com/ap/070917/oil_prices.html?.v=2

[tricha]

Heavy Metal -"As I've said before, oil reaches a cyclical annual peak around now.... back to $60 by Xmas?"

Depends if we u believe in peak oil like I do (1000 barrells a second)


OPEC’s Cosmetic Production Increase Results in Upwards Price Trend
By Sven Ridley-Wordich
14 Sep 2007 at 12:00 PM GMT-04:00

AMERSTERDAM (ResourceInvestor.com) -- The unexpected production quota increase by OPEC, announced Sept. 11 in Vienna, has disappointed most analysts. The results of the OPEC meeting have been qualified as largely cosmetic, not having any real positive impact on global oil markets. The current price developments, already showing signs of an upward trend which could easily reach the $90 per barrel soon, have been a point of concern for most Western consumers.
However, the impact of current price developments will not be as large based on adjustments made for inflation and currency developments, and a real record price for oil still is not reached. Most analysts have stated that current oil prices, which have touched a level of above $80 per barrel, are in reality still lower than record prices set at the end of the 1970s. At the same time, the impact of oil on global economic developments, especially in the West, are increasingly based on perception, while negative economic effects have been minimal.

For the developing world, including China and India, the situation has become more problematic. Asia’s growing thirst for oil and gas needs to be countered by almost unheard of import volumes, as countries such as China, India and even Japan, are almost totally depended on energy imports. The latter needs to be financed by increased exports or internal loans. This situation will in the end slow down the still exponential growth of the latter economies, which will have its own impact on Western economic growth expectations.
In the meantime, OPEC’s current strategy showed again an unwillingness to take into account the increased economic dependency between producers and consumers. Saudi Arabian Minister of Oil Ali Al Naimi’s push for a 500,000-barrel-per-day production increase of OPEC is without any relevance. While trying to smooth up his relations with the U.S. and EU, Al Naimi has been unwilling and possibly incapable to force hard-liners within the oil cartel, such as Iran, Libya, Venezuela and Algeria, to open up their taps to give the oil market some hard-needed breathing space.
The 500,000 bpd of additional crude oil on the market is only a drop of what is needed the coming years. Some analysts have been less sceptical, stating that OPEC-10 (excluding Iraq and Angola) were already producing 900,000 bpd more than officially allowed. The latter fact was, however, known to the market (traders, hedge funds and analysts) for months, which means this fact was already incorporated in the current price analysis.
The new production increase of 500,000 bpd is also minimal when taking into account the fact that Abu Dhabi, an OPEC member, will be taking around 600,000 bpd out of the market the coming weeks due to planned maintenance of its fields. This will put another pressure on current price levels.
If really targeting a much more liquid global oil market, OPEC should have increased its volumes by at least 1.5 million to 2 million bpd, which would have countered predicted demand growth the coming two quarters. According to the International Energy Agency (IEA) in Paris, demand during the third and fourth quarters of 2007 will increase by 2 million bpd, due to winter season factors on the Northern Hemisphere and economic growth worldwide. The call on OPEC will increase, while total global oil production already is lagging behind. Latest figures have shown that at present, total demand already outstripped supply by between 1.3 million to 1.8 million bpd; this already has taken into account OPEC-10 overproduction before the Vienna meeting. In the coming months, this situation will be become even worse as demand will not at all be met, leaving aside possible additional disturbances in supply with issues in Iran, Syria and Venezuela.
Opinions differ on the reasons for OPEC’s current stand. The fact that OPEC’s production strategy in 1998 during the Asia crisis proved totally wrong, when Saudi Arabia dumped additional barrels on the market, which resulted in a price collapse to $8 per barrel, has been quoted as being behind OPEC’s current stand. Partly this could be a reason, but most probably national budgetary reasons are more applicable. Most OPEC countries are implementing or planning multi-billion mega-projects to increase their oil and gas capacities and diversify their respective economies. Without high oil windfalls this would not be possible. A further financial crisis in OPEC could also result in increased instability as most new projects are targeting greater local participation and employment. Western countries should not expect that OPEC countries will address pressing economic issues in their regions as important to their own local situations.
Although OPEC is feeling the heat from the West, the current policy will not be changed. National interests have taken over from global economic issues. Additionally, OPEC’s overall position as the world’s largest energy source is under pressure. Slowly the West will start to realize that OPEC could not be capable of increasing its production to targeted levels any more. Statements made by leading producers, such as Saudi Arabia, that there is still spare production capacity should be taken with a grain of salt. Oil analysts are increasingly worried that no spare capacity is available in the market, and OPEC is unable physically to increase production anymore.
Oil prices will continue their upward trend - $90 or even $100 per barrel are in reach. No real solution is presently available to prevent this from happening, except a total economic breakdown. The latter is at present not feasible; all signs are still on green for growth.
Consumers in the West should realize that their gasoline at the pump will become much more expensive the next months. The winter season is approaching; OPEC will not be able to provide the necessary oil blanket to cover us during that time.

[shasta]

Heavy Metal -"As I've said before, oil reaches a cyclical annual peak around now.... back to $60 by Xmas?"

Depends if we u believe in peak oil like I do (1000 barrells a second)


OPEC’s Cosmetic Production Increase Results in Upwards Price Trend
By Sven Ridley-Wordich
14 Sep 2007 at 12:00 PM GMT-04:00

AMERSTERDAM (ResourceInvestor.com) -- The unexpected production quota increase by OPEC, announced Sept. 11 in Vienna, has disappointed most analysts. The results of the OPEC meeting have been qualified as largely cosmetic, not having any real positive impact on global oil markets. The current price developments, already showing signs of an upward trend which could easily reach the $90 per barrel soon, have been a point of concern for most Western consumers.
However, the impact of current price developments will not be as large based on adjustments made for inflation and currency developments, and a real record price for oil still is not reached. Most analysts have stated that current oil prices, which have touched a level of above $80 per barrel, are in reality still lower than record prices set at the end of the 1970s. At the same time, the impact of oil on global economic developments, especially in the West, are increasingly based on perception, while negative economic effects have been minimal.

For the developing world, including China and India, the situation has become more problematic. Asia’s growing thirst for oil and gas needs to be countered by almost unheard of import volumes, as countries such as China, India and even Japan, are almost totally depended on energy imports. The latter needs to be financed by increased exports or internal loans. This situation will in the end slow down the still exponential growth of the latter economies, which will have its own impact on Western economic growth expectations.
In the meantime, OPEC’s current strategy showed again an unwillingness to take into account the increased economic dependency between producers and consumers. Saudi Arabian Minister of Oil Ali Al Naimi’s push for a 500,000-barrel-per-day production increase of OPEC is without any relevance. While trying to smooth up his relations with the U.S. and EU, Al Naimi has been unwilling and possibly incapable to force hard-liners within the oil cartel, such as Iran, Libya, Venezuela and Algeria, to open up their taps to give the oil market some hard-needed breathing space.
The 500,000 bpd of additional crude oil on the market is only a drop of what is needed the coming years. Some analysts have been less sceptical, stating that OPEC-10 (excluding Iraq and Angola) were already producing 900,000 bpd more than officially allowed. The latter fact was, however, known to the market (traders, hedge funds and analysts) for months, which means this fact was already incorporated in the current price analysis.
The new production increase of 500,000 bpd is also minimal when taking into account the fact that Abu Dhabi, an OPEC member, will be taking around 600,000 bpd out of the market the coming weeks due to planned maintenance of its fields. This will put another pressure on current price levels.
If really targeting a much more liquid global oil market, OPEC should have increased its volumes by at least 1.5 million to 2 million bpd, which would have countered predicted demand growth the coming two quarters. According to the International Energy Agency (IEA) in Paris, demand during the third and fourth quarters of 2007 will increase by 2 million bpd, due to winter season factors on the Northern Hemisphere and economic growth worldwide. The call on OPEC will increase, while total global oil production already is lagging behind. Latest figures have shown that at present, total demand already outstripped supply by between 1.3 million to 1.8 million bpd; this already has taken into account OPEC-10 overproduction before the Vienna meeting. In the coming months, this situation will be become even worse as demand will not at all be met, leaving aside possible additional disturbances in supply with issues in Iran, Syria and Venezuela.
Opinions differ on the reasons for OPEC’s current stand. The fact that OPEC’s production strategy in 1998 during the Asia crisis proved totally wrong, when Saudi Arabia dumped additional barrels on the market, which resulted in a price collapse to $8 per barrel, has been quoted as being behind OPEC’s current stand. Partly this could be a reason, but most probably national budgetary reasons are more applicable. Most OPEC countries are implementing or planning multi-billion mega-projects to increase their oil and gas capacities and diversify their respective economies. Without high oil windfalls this would not be possible. A further financial crisis in OPEC could also result in increased instability as most new projects are targeting greater local participation and employment. Western countries should not expect that OPEC countries will address pressing economic issues in their regions as important to their own local situations.
Although OPEC is feeling the heat from the West, the current policy will not be changed. National interests have taken over from global economic issues. Additionally, OPEC’s overall position as the world’s largest energy source is under pressure. Slowly the West will start to realize that OPEC could not be capable of increasing its production to targeted levels any more. Statements made by leading producers, such as Saudi Arabia, that there is still spare production capacity should be taken with a grain of salt. Oil analysts are increasingly worried that no spare capacity is available in the market, and OPEC is unable physically to increase production anymore.
Oil prices will continue their upward trend - $90 or even $100 per barrel are in reach. No real solution is presently available to prevent this from happening, except a total economic breakdown. The latter is at present not feasible; all signs are still on green for growth.
Consumers in the West should realize that their gasoline at the pump will become much more expensive the next months. The winter season is approaching; OPEC will not be able to provide the necessary oil blanket to cover us during that time.

Oil looks likely to stay around the $US70 - 80 per barrel mark for the forseeable future.

I agree with Tricha re peak oil, & that last bit of the article saying oil is heading to $US90 - 100, it certainly is, but whether it spikes there & retreats or moves higher & stays is the big question.

Notwithstanding i'm looking for another oil producer to enter the "Shasta" stable.

Trouble is i've looked at so many & none stand out, to me anyway...

[Heavy Metal]

I agree with Tricha re peak oil, & that last bit of the article saying oil is heading to $US90 - 100, it certainly is, but whether it spikes there & retreats or moves higher & stays is the big question.

That 'article' is from Resource Investor, another Kitco clone doom and gloom gold peddling website. Its views should be taken at face value.

Shasta, I share your belief that there are no ASX oil companies that represent good value at the moment, almost all of them disappoint come quarterly production report time. Why rush to buy anyway since there is a very high chance the oil price will drop significantly by the EOY - then it will be time to buy a few well chosen oil/gas companies.

[Huang Chung]

Heavy Metal -"As I've said before, oil reaches a cyclical annual peak around now.... back to $60 by Xmas?"

Tricha - "Depends if we u believe in peak oil like I do (1000 barrells a second)"

Tricha, I would really be surprised if peak oil will have the sort of instant impact you seem to be implying. It's probably going to be a gradual realisation that peak production has been achieved, some time after the event has actually occurred...certainly not something that is going to impact the oil market one way or the other by this Christmas.