Oil Price Update as of 1-5-2011

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We are fascinated by the heresay and hysteria that those involved with pricing oil impart on us the users.
One really cannot trust anything said by any of the pundits.
Two of the most quoted on oil prices are the Schork report and  Trilby Lundberg
We are sure these folks get a great holiday gift from the Saudis, Exxon, BP etc since we are all lead to believe that oil MUST always go UP UP UP.

WHY is that when demand-even Asian demand is quiescent

Here’s a quote from a recent WSJ article saying, “Chinese Rate Rise Signals Slow Growth,”
It basically says that the Chinese interest rate rise on December 25 2010 will slow their economy greatly.
“The World Bank expects China’s potential annual growth rate to drop to about 7% between 2016 and 2020 compared with 9.6% from 1995 to 2009.”

Here’s a news update from Reuters online yesterday:

“Oil sentiment has turned decidedly bullish, partly driven by unusually cold weather, but more due to an increasingly optimistic consensus view on 2011 economic performance, especially for the U.S.,” JPMorgan analysts led by Lawrence Eagles said.
Prices rallied on Monday on accelerating manufacturing activity in industrialized economies and icy weather.
Manufacturing in the United States and Europe accelerated in December, while growth in China and India slowed to more sustainable levels in another boost for the global economic outlook.
On Tuesday, a report showed that British manufacturing activity expanded at its fastest pace in over 16 years in December, above expectations.

“The wildcard of natural and man-made disasters steadily adds twists to commodity markets,” it added, citing an earthquake in Chile and floods in Columbia and Australia as contributing to a global commodities rally.

U.S. INVENTORIES

“Increasing demand for heating oil is helping to reduce the inventory overhang,” said Credit Suisse analysts including

However, this is likely to be temporary as heating oil demand usually peaks around mid-January. While the short-term technical trend and momentum indicators remain positive, we think that ample OPEC spare production capacity is likely to cap the upside.”

U.S. crude futures remain in a stubborn contango, a price structure where prompt oil is cheaper than barrels for later delivery. This market condition encourages storage.

Of course the reason to bid up the price always seems to be void of supply demand dynamics. Now they are blaming it on the good holiday sales, the hard winter in the north of the USA, the dollar always gets blamed since oil is priced in dollars, of course there is always the shorting done by American stalwarts such as Goldman Sachs. 
What about the Yankees not getting Cliff Lee-have not heard that one yet???


We feel it is all a mirage and are a bit perturbed at all humans that use oil and put up with all this-guess that’s you and me.

If demand for petrol has truly begun to rise more slowly even despite all the pressure by the “oilists” to make the price rise then true supply demand says the trading range should be about $70-80 per barrel and can be consistent rather than approaching the $100 per barrel the “oilists” want.

Folks we always come back to personal responsibility. If you will all walk and bike more and drive less, then the demand quotient will take care of itself, we will not get these price spikes and our lives will be more settled

Conservastore can always help

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