Oil & Gas 01 (May 08 - Jul 08)

[kennynah]

notice the oil ETFs are going to Hong Kong in the last 30mins..????

[HengHeng]

ya but usually i'm more concerned with the options the writers ( kui will drop hints one)... usually tells me something is going to happen though i dunno what ..

[kennynah]

very nice... see OIH Open Interest and Volume

[HengHeng]

i know something going to happen but i duno what is .. can teach me how to read them ?

[kennynah]

i oso duno.....whether those are major Longs or Short Puts... very different if read wrongly... but u right...something gonna happen soon to Oil...it appears


howvever, i am seeing gold losing some steam at this hour....this hour...usually only ghost are playing....by this time...already bo movement liao...or pennies... knn..it is actually moving down.....when major indexes just showed hand into negative....got meaning meh....

[kennynah]

amyways....here say here finish.... i wont bet on a equities tanking session tomorrow..

[HengHeng]

past experience tells me .. when i dunno don't enter wait i go buy hedge first. .. then exit those longs .. brain confirm not working liaoz .. coz i don't even know what i'm thinking now.

Haiz ... cannot think properly liaoz .. best keep completely out.

[winston]

Oil Rally of 697% Surpassed Dot-Com Craze in Speculators' Mania
By Michael Patterson and Elizabeth Stanton

June 13 (Bloomberg) -- The rally that drove oil to a record $139.12 a barrel last week surpassed the gains in Internet stocks that preceded the dot-com crash in 2000.

Crude rose 697 percent since trading at $17.45 a barrel on the New York Mercantile Exchange in November 2001, and reached 28 record highs this year. The last time a similar pattern was seen in equities was eight years ago, when Internet-related stocks sent the Nasdaq Composite Index up 640 percent to its highest level ever, according to data compiled by Bloomberg and Bespoke Investment Group LLC.

The Nasdaq tumbled 78 percent from its March 2000 peak, erasing about $6 trillion of market value, as investors concluded that prices weren't supported by profits at companies such as Broadcom Corp. and Amazon.com Inc.

Billionaire investor George Soros and Stephen Schork, president of Schork Group Inc., say oil is ready to tumble because prices aren't justified by supply and demand.

``There's nothing different between this mania, the dot-com mania, the real estate mania, the Dow Jones mania of the 1920s, the South Sea bubble and the Dutch tulip-bulb mania,'' said Schork, whose Villanova, Pennsylvania-based firm advises the Organization of Petroleum Exporting Countries, Wall Street firms and oil companies on the outlook for energy prices. ``History repeats itself over and over and over again.''

Oil climbed on growing demand from China and India, whose economies expanded the past seven years at an average annual pace of 10.2 percent and 7.3 percent, respectively. Supply disruptions in Nigeria and Iraq and declining production in Russia also boosted prices. Investors added about $250 billion to commodity index trading strategies since 2003, according to Mike Masters, president and founder of Masters Capital Management, a St. Croix- based hedge fund.

Money Flow

Money is flowing into oil as the global economy slows. The worst U.S. housing slump since the 1930s and more than $390 billion of writedowns and credit losses at banks will slow global growth to 2.7 percent this year from 3.7 percent in 2007, according to the World Bank.

The U.S. economy's expansion may slow to 1.3 percent this year from 2.2 percent in 2007, dragging down oil demand by 240,000 barrels a day, according to economists surveyed by Bloomberg and Energy Department data. In China, the second- biggest fuel consumer after the U.S., economic growth may fall to 10.1 percent from 11.9 percent, the Bloomberg survey shows.

Supply, Demand

``I don't know if you can classify it as a bubble or not,'' said Masters. ``But there is no question that investor demand is having an effect on price. Very little of it has to do with physical supply and demand of crude oil.'' Masters testified at a Senate hearing in May on the role of speculators in commodities markets.

Gains in oil are the result of a ``bubble'' caused by speculation from index funds and a tight balance between supply and demand, Soros said in testimony before the Senate Committee on Commerce, Science and Transportation on June 3. ``The bubble is superimposed on an upward trend in oil prices that has a strong foundation in reality,'' he said.

Commodity index traders account for about 40 percent of the open interest, or outstanding contracts, in the 12 agricultural commodities for which the Commodity Futures Trading Commission reports data, according to Chicago-based Bianco Research LLC.

Crude futures more than doubled in the past year and surged $10.75 a barrel on June 6, the biggest rise on record and the largest in percentage terms since June 1996. Robert Aliber, a professor of economics emeritus at the University of Chicago Graduate School of Business, says the risk of a ``correction'' has increased because prices climbed so fast.

`Momentum Players'

``You've got speculation in a lot of commodities and that seems to be driving up the price,'' Aliber, co-author of ``Manias, Panics, and Crashes: A History of Financial Crises,'' said in an interview from Hanover, New Hampshire. ``Movements are dominated by momentum players who predict price changes from Wednesday to Friday on the basis of the price change from Monday to Wednesday.''

Burton Malkiel, a Princeton University economics professor and author of ``A Random Walk Down Wall Street,'' says the rise in oil may be justified because supplies are limited and demand in developing economies is increasing. That distinguishes oil from the market for technology stocks in the 1990s, where supply ``could be expanded infinitely'' and new stock issues helped push down prices, he said.

``The picture is fundamentally different than the Internet picture,'' Malkiel said in an interview from Princeton, New Jersey. ``I'm not saying we're running out of oil, but we're clearly supply-constrained. Five and 10 years from now, the price is going to be higher than $134.''

Nasdaq's Rally

The Nasdaq reached a record intraday high of 5,132.52 on March 10, 2000, in a rally that started in June 1994. Investors plowed $199 billion into mutual funds dedicated to U.S. equities during the 10-month stretch leading up to the peak, including $36.5 billion in February of that year, data from TrimTabs Investment Research in Sausalito, California show.

The flood helped boost the price-to-earnings ratio on shares of Irvine, California-based Broadcom to 617 in March 2000, according to Bloomberg data. Shares of the semiconductor maker, which surged 351 percent in 1999, lost 89 percent over the next three years. Broadcom fell 1.1 percent to $25.30 in Nasdaq trading yesterday.

``You can look at the chart and say oil's taking on the characteristics of a bubble,'' said James Bianco, the president of Bianco Research. Still, ``it may have a long way to go before it eventually peaks,'' he said.

[winston]

OPEC cuts oil demand forecast, sees ample supply
Fri Jun 13, 2008 8:30am EDT By Alex Lawler

LONDON (Reuters) - OPEC on Friday cut its forecast for global oil demand growth in 2008 for the third time this year, the latest sign that record-high oil prices are slowing consumption.

The exporter group also said that it is pumping more than forecast demand for its oil, and that the current production rate combined with extra supply from Saudi Arabia should lead to rising inventories in the third quarter.

World oil demand will rise by 1.10 million barrels per day (bpd) this year, 60,000 bpd less than the previous forecast, OPEC said in its Monthly Oil Market Report for June. The previous reductions were in May and February.

"The slow U.S. economy along with current oil prices will have its effect on oil demand not only in the U.S. but across the OECD countries in the second half of this year," the report by OPEC economists said.

"China, the Middle East, Latin America and India are expected to show healthy growth in oil demand for the remainder of the year."

The report reaffirms OPEC's view that consumers have enough oil and that factors beyond oil supply and demand are sending prices to all-time highs. Crude oil hit a record $139.12 a barrel a week ago.

Some consumer countries, such as the United States, say current prices reflect a tight balance between supply and demand. The U.S. this year has been urging OPEC to raise output.

But the Organization of the Petroleum Exporting Countries says factors like the weakness of the U.S. dollar, political tension and speculation are leading the market higher.

"Current price levels do not reflect supply and demand realities," OPEC said.

"A review of prospects for the remainder of the year also shows little support for prices to remain at current levels."

LESS THAN IEA

Producer and consumer countries will meet on June 22 in Jeddah, Saudi Arabia, to discuss the reasons for the jump in prices, OPEC said. But the meeting is not expected to lead to an easy fix.

British Prime Minister Gordon Brown, who plans to attend, said on Thursday he did not expect the talks to result in a short-term rise in oil output, but urged the world to work on a long-term energy strategy.

OPEC, source of two in every five barrels of oil, is the latest forecaster to trim its projection for world oil demand this year because of the slowing world economy and high prices.

But OPEC's adjustment is much smaller than that of the International Energy Agency, the adviser to 27 industrialized countries, which earlier this week cut its demand growth forecast by 230,000 bpd.

Strong consumption in China and the Middle East has been offsetting weak demand in members of the Organization for Economic Co-operation and Development (OECD).

OPEC again trimmed its estimate for supply from non-member countries in 2008, although its lower projection for demand resulted in little change in the amount of oil OPEC members need to pump to balance the market.

It expects non-OPEC supply to average 50.13 million bpd this year, down 50,000 bpd from the previous forecast, mainly due to lower-than-expected output from the UK. Expected demand for OPEC oil is steady at 31.82 million bpd.

The 13 OPEC members produced 32.19 million bpd in May, the report said, citing figures from secondary sources. It also said Saudi Arabia is expected to raise output by 300,000 bpd in June.

That puts OPEC production higher than expected demand for the group's oil in 2008, and should lead to a higher-than-normal inventory build in the third quarter and a contra-seasonal rise in the fourth.

"This clearly demonstrates that the market is amply supplied and that claims that the recent surge in prices is due to a supply shortage are unjustified," OPEC said.

[kennynah]

hallo young man h2...where r u tonight???? twang is it... ?

i was waiting for you to send some meaningful postings... knn...obviously u sleeping.,...

nevermind.... i hoe to see your big time posting over the weekend... (wink)