Crude Oil

[Huang Chung]

Seems that you either need decades of reserves (e.g. Woodside) or a major oil discovery relative to the company's size (e.g. Innamancka / AED) to get rerated.

I'm not sure if the ARQs and BPTs will continue to miss out on any rerating, or whether it will happen down the track, presumably when they release their half yearly's.

[yogi-in-oz]

Hi HC,

Aside from field sizes, there's another distinct (and important) difference between
the bigger players, like WPL and the smaller producers ... and smaller producers,
like ARQ and BPT for example .....

..... that difference is in the marketing of their products ... Woodside is more
attuned to INTERNATIONAL oil and gas EXPORT prices, whereas ARQ and BPT
have a limited domestic market to sell into ... hence, they receive only what
local refineries and markets are willing to pay for their oil and gas.

This is especially so for ARQ and EGO, who are trucking oil, south to Kwinana
refinery .....

..... some producers may also be locked into a fixed percentage of the
world oil price, while others may have sold their oil/gas forward, at fixed
prices to secure loans, in the early development of their fields.

So, we cannot take it for granted, that high international oil'gas prices
are being directly reflected here, in their totality .....

happy days

paul



=====

[Huang Chung]

Some very interesting points you make Paul.....

If this is the case, it doesn't seem to be factored into people's thinking on this forum. It would be interesting to get the view points of some our more distinguished oil followers on S/T.

[Mick100]

Some very interesting points you make Paul.....

If this is the case, it doesn't seem to be factored into people's thinking on this forum. It would be interesting to get the view points of some our more distinguished oil followers on S/T.

Not sure if I'm a "distinguished oil follower" but yes - I am aware that small producers do not neccessarily command the full world price for their oil

As I understand, refiners have to "fine tune" their plants for the oil of each different oil feild so the oil from large fields commands a higher price than a comparible oil from a small feild, ie less fine tuning if you can do longer runs on the same crude oil.

I was at the NZO meeting recently where managment said they had supplied crude to 2 or 3 different refiners to establish which refiner valued the oil the most - each paid a different price for the crude.

What it comes down to is that crude oil can vary from one feild to another and there are also differences between refineries - many refiners in the world today cannot process heavy sour crude at all and even the light crudes are valued differently by different refiners. In saying that , prices paid to small producers, although may be less than world price, will still be relative to world price, ie, still benifiting from higher oil prices
.

[Mick100]

[quote=Mick100;172436][quote=Mick100;171491][quote=Mick100;170570][quote=Mick100;169708][quote=Mick100;167752][quote=Mick100;166946]Commercial (hedgers) net shorts positions

price open interest
7/08/07 net short 117500 71.50
14/08/07 net short 85700 72.00
21/08/07 net short 42600 71.00
28/08/07 net short 25000 74.00
4/09/07 net short 34500 77.00
11/09/07 net short 36000 77.50
18/09/07 net short 44500 81.00
25/09/07 net short 45300 79.50

2/10/07 net short 59500 80.00
9/10/07 net short 66000 80.26
16/10/07 net short 78000 87.61
23/10/07 net short 60000 85.27 1,408,000
30/10/07 net short 77400 90.38 1,448,000
06/11/07 net short 84000 96.70 1,513,000
13/11/07 net short 23000 91.17 1,445.000

commercials reduced shorts by 46300 and added 14700 longs leading to a reduction in net short of 61000 for the week

Mainsteam media would have you believe that the rising oil price is being driven by speculators - the COT report proves otherwise.
The oil price is being driven by the commercials who are certainly not speculators - they are buying on behalf of refineries.

Buckle your seatbelts - looks like we are heading for a supply crunch - peak oil is here

The oil price will smash $100 soon and it won't stop there either.
My only concern now is that the price goes too high too quickly and sets off a global reccession, ie, be careful what you wish for
,

[shasta]

[quote=Mick100;173455][quote=Mick100;172436][quote=Mick100;171491][quote=Mick100;170570][quote=Mick100;169708][quote=Mick100;167752]

Commercial (hedgers) net shorts positions

price open interest
7/08/07 net short 117500 71.50
14/08/07 net short 85700 72.00
21/08/07 net short 42600 71.00
28/08/07 net short 25000 74.00
4/09/07 net short 34500 77.00
11/09/07 net short 36000 77.50
18/09/07 net short 44500 81.00
25/09/07 net short 45300 79.50

2/10/07 net short 59500 80.00
9/10/07 net short 66000 80.26
16/10/07 net short 78000 87.61
23/10/07 net short 60000 85.27 1,408,000
30/10/07 net short 77400 90.38 1,448,000
06/11/07 net short 84000 96.70 1,513,000
13/11/07 net short 23000 91.17 1,445.000

commercials reduced shorts by 46300 and added 14700 longs leading to a reduction in net short of 61000 for the week

Mainsteam media would have you believe that the rising oil price is being driven by speculators - the COT report proves otherwise.
The oil price is being driven by the commercials who are certainly not speculators - they are buying on behalf of refineries.

Buckle your seatbelts - looks like we are heading for a supply crunch - peak oil is here

The oil price will smash $100 soon and it won't stop there either.
My only concern now is that the price goes too high too quickly and sets off a global reccession, ie, be careful what you wish for
,

Sell your cars, buy oil stocks & bike to work, that what you mean?

[cantab]

An oilman on CNBC last week said the problem is "the low hanging fruit" has gone, another oilman said "$50 oil" has gone. One of the oilmen mentioned new technology available such as horizontal drilling that can get extra oil out. (IPM are trying this)

Interestingly a few commentators on CNBC from NY were saying a good way of benefiting from high oil is to buy alternative energy stocks such as solar however one commentator thought US solar stocks were overpriced.

Another way would be investing in rare earths and perhaps Lithium to power hybrid/plug in vehicles. (my own thoughts)

[shane_m]

If OPEC starts selling oil in Euro US dollar going to free fall. Russia and Iran has already indicated that they are going to do similar.

[bermuda]

Saudi Arabia has a real battle on its hands to keep oil in $US.

This is only the beginning. Iran, Russia and Venezuela are going to do their own thing.

Goodbye $US. It is all over. Sorry Mr Bush. You and Greenspan have been living the American dream for far too long. Time to wake up to reality.

53 page report on ww.petrodollarwarfare.com is a long but very interesting tale by William Cohen. Report dated 15 January 2007.

[bermuda]

Saudi Arabia has a real battle on its hands to keep oil in $US.

This is only the beginning. Iran, Russia and Venezuela are going to do their own thing.

Goodbye $US. It is all over. Sorry Mr Bush. You and Greenspan have been living the American dream for far too long. Time to wake up to reality.

53 page report on ww.petrodollarwarfare.com is a long but very interesting tale by William Clark. Report dated 15 January 2007.

I wonder what Bush's next move is?