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TheNaif
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Joined: November 11th, 2005, 2:28 pm

Oil bubble again?

May 9th, 2011, 4:05 pm

QuoteOriginally posted by: FermionDoes the recent volatility in commodities reflect the ongoing battle between bubble creators, bubble busters and those who believe there is no bubble? Or is it a supply/demand issue as gardener3 suggests?Negative real interest rates is the main cause for the increase in commodities and PM IMHO
 
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Fermion
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Joined: November 14th, 2002, 8:50 pm

Oil bubble again?

May 13th, 2011, 10:45 pm

QuoteOriginally posted by: TheNaifQuoteOriginally posted by: FermionDoes the recent volatility in commodities reflect the ongoing battle between bubble creators, bubble busters and those who believe there is no bubble? Or is it a supply/demand issue as gardener3 suggests?Negative real interest rates is the main cause for the increase in commodities and PM IMHOI was referring to the recent volatility (movement in both directions) not the upward trend that preceded it.
 
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frenchX
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Joined: March 29th, 2010, 6:54 pm

Oil bubble again?

May 18th, 2011, 6:22 pm

What is the fundamental reversal price in oil ? It seems there is a very strong resistance in the oil charts.
 
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ppauper
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Joined: November 15th, 2001, 1:29 pm

Oil bubble again?

October 25th, 2012, 10:00 am

US Shale Gas Bubble is Set to Burst ?
 
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willsmith
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Joined: January 14th, 2008, 11:59 pm

Oil bubble again?

October 25th, 2012, 7:49 pm

My opinion:The oil price is back to being controlled by OPEC. OPEC was dominant in the market in the 1970's-80's, lost market share afterwards but is back to having sufficient market share that what they say, goes. And OPEC's share is only going to rise, they have far more remaining reserves than anyone else.Most of the middle east producers have hugely increased their break-even price of oil to support their own domestic budgets. Saudi set an oil price target of $25-$28 not many years ago, now they need something like $70 to support their huge benefits giveaway, to fend off an Arab Spring.So any time oil (let's talk WTI) goes below about $70, i.e. Brent below about $90, they'll cut production. Some OPEC members will cheat (Iran, Venezuela) but enough (Saudi, UAE, Qatar, Kuwait) toe the line to make it work.Meanwhile saudi wants oil (not sure which grade, but I think they mean WTI in this case) to be below $100 to keep the world economy alive. They have sufficient spare pumping capacity to keep it there at the moment. There's been numerous statements by their oil minister saying exactly this.So Saudi and the wider OPEC is doing a good job of what they want - keeping WTI in the $70-$100 range. According to one of my models the bubble in oil when it rose to $140 in mid-2008 only exceeded fundamentals for about 1 year (on the upside) then another 9 months on the downside.
Last edited by willsmith on October 24th, 2012, 10:00 pm, edited 1 time in total.
 
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Cuchulainn
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Oil bubble again?

October 31st, 2012, 4:23 pm

YAMANI OR YA LIFE! oil 1973, 1979 Each had bad consequences after the event.
Last edited by Cuchulainn on October 30th, 2012, 11:00 pm, edited 1 time in total.
 
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MattF
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Joined: March 14th, 2003, 7:15 pm

Oil bubble again?

November 1st, 2012, 11:36 am

I think the prejudice against batteries in electric cars will evaporate quite quickly given another iteration of efficiency improvements. It's inconvenient to have to stop every few hundred miles and squirt a highly flammable liquid into your vehicle, plus you need an extensive infra-structure of gas stations. Once battery life becomes equivalent to a full tank of gas most people will find charging at home more convenient.
 
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Traden4Alpha
Posts: 3300
Joined: September 20th, 2002, 8:30 pm

Oil bubble again?

November 1st, 2012, 12:23 pm

QuoteOriginally posted by: MattFI think the prejudice against batteries in electric cars will evaporate quite quickly given another iteration of efficiency improvements. It's inconvenient to have to stop every few hundred miles and squirt a highly flammable liquid into your vehicle, plus you need an extensive infra-structure of gas stations. Once battery life becomes equivalent to a full tank of gas most people will find charging at home more convenient.The physics & chemistry isn't favourable for this on a very deep level. A gasoline engine has the built-in unfair advantage that it doesn't have to operate a reversible reaction and the car doesn't have to carry the oxidizer as cargo (the 2.4 kg of oxygen needed to burn each kg of gasoline). Moreover, the electrical grid (in the US at least) doesn't have the capacity to handle large numbers of cars recharging.
 
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Deliberator
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Joined: December 9th, 2009, 10:34 pm

Oil bubble again?

December 7th, 2012, 12:13 am

QuoteOriginally posted by: Traden4AlphaQuoteOriginally posted by: MattFI think the prejudice against batteries in electric cars will evaporate quite quickly given another iteration of efficiency improvements. It's inconvenient to have to stop every few hundred miles and squirt a highly flammable liquid into your vehicle, plus you need an extensive infra-structure of gas stations. Once battery life becomes equivalent to a full tank of gas most people will find charging at home more convenient.The physics & chemistry isn't favourable for this on a very deep level. A gasoline engine has the built-in unfair advantage that it doesn't have to operate a reversible reaction and the car doesn't have to carry the oxidizer as cargo (the 2.4 kg of oxygen needed to burn each kg of gasoline). Moreover, the electrical grid (in the US at least) doesn't have the capacity to handle large numbers of cars recharging.Just as an interesting add on to this discussion there is a recent blog post by James Hamilton, called Will U.S. Oil consumption continue to decline?. It is based around vehicle fuel efficiency improving.
 
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Traden4Alpha
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Joined: September 20th, 2002, 8:30 pm

Oil bubble again?

December 7th, 2012, 12:43 am

QuoteOriginally posted by: DeliberatorQuoteOriginally posted by: Traden4AlphaQuoteOriginally posted by: MattFI think the prejudice against batteries in electric cars will evaporate quite quickly given another iteration of efficiency improvements. It's inconvenient to have to stop every few hundred miles and squirt a highly flammable liquid into your vehicle, plus you need an extensive infra-structure of gas stations. Once battery life becomes equivalent to a full tank of gas most people will find charging at home more convenient.The physics & chemistry isn't favourable for this on a very deep level. A gasoline engine has the built-in unfair advantage that it doesn't have to operate a reversible reaction and the car doesn't have to carry the oxidizer as cargo (the 2.4 kg of oxygen needed to burn each kg of gasoline). Moreover, the electrical grid (in the US at least) doesn't have the capacity to handle large numbers of cars recharging.Just as an interesting add on to this discussion there is a recent blog post by James Hamilton, called Will U.S. Oil consumption continue to decline?. It is based around vehicle fuel efficiency improving.Those aren't the only phenomena pointing toward a decline in US oil consumption. The aging demographics of the US and declining rates of drivers licenses among the young suggest the US will have fewer drivers going few miles.
 
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Deliberator
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Joined: December 9th, 2009, 10:34 pm

Oil bubble again?

December 8th, 2012, 1:25 am

QuoteOriginally posted by: Traden4AlphaThose aren't the only phenomena pointing toward a decline in US oil consumption. The aging demographics of the US and declining rates of drivers licenses among the young suggest the US will have fewer drivers going few miles.That is correct. It would be interesting to see some forecasts on future industry use.