Oil will be difficult to sustain above $100 per barrel

**Cydkar** · 05-30-2008, 09:04 AM

Sweet! I may be able to heat my 25,000 sq. foot castle next winter.

**mramseyISU** · 05-30-2008, 09:40 AM

Originally Posted by herbicide

Ocean going Yacht will out-do both. A good fast off-shore boat will best either as well. All four score high in the fun factor!

Maybe but who's going to cut you off in rush hour if you're driving the tank? Nobody that's who.

**Cyclonesrule91** · 05-30-2008, 09:42 AM

I really am wondering how long crude will be able to stay above $100/barrel myself. Yesterday crude rallied on some bullish weekly stock data, showing oil stocks fell nearly eight million barrels this past week, which was the biggest drop since September 2004. The rally deteriorated quickly as traders quickly took profits. One very critical key prompting the selling was the announcement by that the CFTC will expand measures to improve the oversight of the energy futures markets to ensure they reflect fundamental economic forces of supply and demand, free of manipulation and fraud.

They always say that the fund speculators will artificially inflate commodity prices as well as artificially deflate prices. The exact same thing is happening in the grains market. You can go back in history and look at daily closes in the commodities and see annual trading ranges that are tighter then what can easily now happen in a week. Volatility defined.

**Stormin** · 05-30-2008, 09:47 AM

I have heard that the oil companies have already taken steps to cut back on refinery production because of the perceived demand drop from consumers. So while oil may indeed drop in price, it may not translate into significantly lower gasoline and diesel prices because the refineries are cutting back on refining the oil. The refineries may only operate at around 80% capacity.

**TxCycloneFan** · 05-30-2008, 09:52 AM

Originally Posted by TykeClone

IRS trudges on with aging computers - CNET News.com

They do so well with technology and large amounts of money

I just got a new laptop and about 30 new pcs for my lab at the IRS.

Last year I got 60 new unix servers for my lab, so yes the IRS does spend money.

**akclone** · 05-30-2008, 09:54 AM

Originally Posted by herbicide

Ocean going Yacht will out-do both. A good fast off-shore boat will best either as well. All four score high in the fun factor!

During launch the external fuel tank of the shutle uses 526,000 gal. during the 8.5 minute launch. This tank feeds the shuttle's 3 main engines that burn the fuel around 1,000 lbs. per second per engine.

Space begins at around 60 miles so thats .000114 MPG. Or around 8700 gallons per mile.
NASA needs a Hybrid.

**herbicide** · 05-30-2008, 09:54 AM

Originally Posted by Stormin

I have heard that the oil companies have already taken steps to cut back on refinery production because of the perceived demand drop from consumers. So while oil may indeed drop in price, it may not translate into significantly lower gasoline and diesel prices because the refineries are cutting back on refining the oil. The refineries may only operate at around 80% capacity.

Partially true. The refiners will reduce refining capacity to match demand in terms of a whole industry, but despite what some believe the oil industry is not a monopoly, nor is there collusion going on.

What that all means is that each individual oil company is going to try to maximize their sales at the going market rate. I am speaking of the refiners (Shell, BP, Mobil, etc). It does not make sense for one company to cut production, because another will make up for it with increased production to gain in sales.

**jdoggivjc** · 05-30-2008, 10:12 AM

Originally Posted by Stormin

I have heard that the oil companies have already taken steps to cut back on refinery production because of the perceived demand drop from consumers. So while oil may indeed drop in price, it may not translate into significantly lower gasoline and diesel prices because the refineries are cutting back on refining the oil. The refineries may only operate at around 80% capacity.

Where did you hear that from? Dateline? 20/20?

**TykeClone** · 05-30-2008, 10:18 AM

Originally Posted by TxCycloneFan

I just got a new laptop and about 30 new pcs for my lab at the IRS.

Last year I got 60 new unix servers for my lab, so yes the IRS does spend money.

Have they ever managed to get their infrastructure upgraded to something modern or are they just spinning their wheels and wasting money?

I'm only being half joking here. The government isn't alone in this, but they can sure throw away a lot of money in failed IT deployments.

**CyCy** · 05-30-2008, 10:33 AM

OPEC must not think oil will be dropping below $100. Otherwise they would be selling more here at $127.

**JonDMiller** · 05-30-2008, 11:10 AM

There is a lot of fund money tied up in oil futures. A lot of it. They helped 'fuel' the run up.

An OPEC member said this week that crude should be around 60 to 70 $/bbl. There is a geopolitical unrest segment in the price of crude, a war segment in the price of crude, and a huge speculative segment in the price of crude.

If she drops, there will be some major, major, major bathtaking by some of those specers who have buyout outmonth contracts at very high prices. The contango pricing of crude has caught some people recently, a week or so ago...and some were buying... They could get whipsawed, because there is more of a backwardation today....and since they have been the ones that have had a big hand in sticking it to us on the gas run up, that is fine...

Just as long as my 401k isn't tied to their funds ;)

**herbicide** · 05-30-2008, 11:23 AM

Originally Posted by JonDMiller

There is a lot of fund money tied up in oil futures. A lot of it. They helped 'fuel' the run up.

An OPEC member said this week that crude should be around 60 to 70 $/bbl. There is a geopolitical unrest segment in the price of crude, a war segment in the price of crude, and a huge speculative segment in the price of crude.

If she drops, there will be some major, major, major bathtaking by some of those specers who have buyout outmonth contracts at very high prices. The contango pricing of crude has caught some people recently, a week or so ago...and some were buying... They could get whipsawed, because there is more of a backwardation today....and since they have been the ones that have had a big hand in sticking it to us on the gas run up, that is fine...

Just as long as my 401k isn't tied to their funds ;)

Do I hear a bubble about to burst?

**bmuff** · 05-30-2008, 11:23 AM

Originally Posted by JonDMiller

There is a lot of fund money tied up in oil futures. A lot of it. They helped 'fuel' the run up.

An OPEC member said this week that crude should be around 60 to 70 $/bbl. There is a geopolitical unrest segment in the price of crude, a war segment in the price of crude, and a huge speculative segment in the price of crude.

If she drops, there will be some major, major, major bathtaking by some of those specers who have buyout outmonth contracts at very high prices. The contango pricing of crude has caught some people recently, a week or so ago...and some were buying... They could get whipsawed, because there is more of a backwardation today....and since they have been the ones that have had a big hand in sticking it to us on the gas run up, that is fine...

Just as long as my 401k isn't tied to their funds ;)

Specers, outmonth, contango, whipsawed, backwardation? Dude, what language are you speaking?

**brianhos** · 05-30-2008, 11:27 AM

Originally Posted by JonDMiller

There is a lot of fund money tied up in oil futures. A lot of it. They helped 'fuel' the run up.

An OPEC member said this week that crude should be around 60 to 70 $/bbl. There is a geopolitical unrest segment in the price of crude, a war segment in the price of crude, and a huge speculative segment in the price of crude.

If she drops, there will be some major, major, major bathtaking by some of those specers who have buyout outmonth contracts at very high prices. The contango pricing of crude has caught some people recently, a week or so ago...and some were buying... They could get whipsawed, because there is more of a backwardation today....and since they have been the ones that have had a big hand in sticking it to us on the gas run up, that is fine...

Just as long as my 401k isn't tied to their funds ;)

Can you short commodities?

**JonDMiller** · 05-30-2008, 11:30 AM

Originally Posted by bmuff

Specers, outmonth, contango, whipsawed, backwardation? Dude, what language are you speaking?

SPecers: Hedge fund speculators
Outmonths: Futures contracts, for months in the future
Contango: when futures months are higher priced than current prices
Backwardation: When futures months are cheaper than current prices (which is more normal)
whipsawed: buying on one side of a commodity, then it goes the other way on you.

I spent a decade in energy commodities ;)