A-rabs eye $90 oil

[Mega]

Gee, may be if the US bombed someone this might not happen?
http://www.telegraph.co.uk/finance/f...ion-fears.html

You can taste it, $100 oil & NO it won't crash back.
Mike

[Starving Steve]

Re: A-rabs eye $90 oil

I don't want the market to believe that oil is going up. Better that it be a surprise when oil rises.
Bears and short-sellers are the best friend that oil bulls have. Bernanke and the inflationists are another long-run friend of the oil market. Then add-in the habitat-preservationists making energy policy in the Obama Administration, and the story on the oil price could not become more bullish.

But don't tell anyone. Just enjoy the ride. And I love "green-tech" and meaningless buzz-words about "infrastructure" and "smart-grids".

Electric cars without the cheap electricity? Windmills in Wyoming with energy transmitted by "super-conductors" to Chicago or New York, SF or LA...... I love it! It's pot-head planning.

[GRG55]

Re: A-rabs eye $90 oil

"...Oil has risen in recent months on the weak US dollar, as investors turn to the commodity as an alternative asset..."

Uncle Ben strikes again. We'll see a weaker Dollar for sure, but not against the Yen, the Yuan, the Euro, the Swiss Franc and all the other places people have been trained to look for it...

[mooncliff]

Re: A-rabs eye $90 oil

I think we entered the long undulating plateau around 2005. A weaker dollar and sudden spike in oil price could easily become a vicious circle.

Orlov sees a very bumpy ride on the way down, with a few cliffs. See example from the last 20 years.
http://cluborlov.blogspot.com/2010/1...s-history.html

See
Linear Extrapolations of Historic Global EROI Trends
http://www.marketoracle.co.uk/Article14756.html

The pensions arguing about whether they are going to get 8% returns or 7.5% returns will seem quaint.
http://www.zerohedge.com/article/us-...breaking-point

[GRG55]

Re: A-rabs eye $90 oil

...The pensions arguing about whether they are going to get 8% returns or 7.5% returns will seem quaint...

Just like the pensions buying triple-A rated MBSs seems quaint today?

[Mega]

Re: A-rabs eye $90 oil

Sorry Guys
its $100 NOW!
http://www.telegraph.co.uk/finance/n...00-barrel.html
Mike

[ThePythonicCow]

Re: A-rabs eye $90 oil

Sorry Guys
its $100 NOW!
http://www.telegraph.co.uk/finance/n...00-barrel.html
Mike

Nah - that's just the headline, referring to Libyan talk.

The article's text begins:

Benchmark US crude for December delivery rose to a high of $84.14, up $1.19, before slipping back to trade at around $83.94 by 1445 GMT, adding to gains of nearly 2pc on Monday. ICE Brent crude climbed 70 cents to $85.32.

[Starving Steve]

Re: A-rabs eye $90 oil

One can learn about inflation economics by watching a dog chase its tail. As costs go up for production, prices go up for the product. And if there is no demand for the product, the production is closed-down. Prices still go up for the produced-product, wherever it is produced. It is entirely irrelevant that there is no demand for the product......... In the jargon of the economists, this might be called, "cost-push inflation".

MV=0 but the Fed is helicoptering M to the stock market. So new money-supply means prices rise, for everything. Oil prices rising, regardless of what demand for oil may be, means inflation in the cost-of-living.

Mr. Bernanke: it's time for your resignation. Once the dog chases its tail, the comedy really begins. And as the new money drives prices upward, the dollar buys less. The dollar falls, and then costs rise further. Hence, "the dog chases its tail."

Debtor-nations dictate to creditor-nations, such as the U.S. dictating to China? Cost-push inflation? "Princeton economics"?

Asset prices may stop de-flating? Maybe? But then, production costs rise. Carrying-costs on homes rise. New cheap money means governments pee-away more money. That would mean taxes continue to go up. So why would U.S. asset prices stop de-flating? Are you reading this, Mr. Bernanke?

And the dumbest and most inefficient producers get rewarded with government grants and bail-outs? Federal grants for solar-energy junk in Silicon Valley? Green-tech and fuzzy-thinking, all funded with grants from the U.S. Dept. of Energy (c/o Dr. Chou) in Washington?

What is your exit strategy, Mr. Bernanke? More faith and credit?