$100 A Barrel Oil is on the Way

#976
#976
Who cares about supply and demand right now-- the price of oil is nowhere in line with the worlds supply vs. demand equilibirum. Don't get me wrong -- a commodity is "supposed" to be based on supply and demand but I think we can all agree that is not this case.

As the value of the dollar rises oil futures will fall until the proper price for supply/demand is once again attained.
 
#979
#979
VolByBirth said:
Who cares about supply and demand right now-- the price of oil is nowhere in line with the worlds supply vs. demand equilibirum. Don't get me wrong -- a commodity is "supposed" to be based on supply and demand but I think we can all agree that is not this case.

As the value of the dollar rises oil futures will fall until the proper price for supply/demand is once again attained.
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I don't understand your statement. Supply promises to increase in the future (how far in the future is up for debate) and demand is slacking off world wide. How would this not create a declining price?

And yes. A stronger dollar will help lower the price as well.
 
#980
#980
KentheOrange said:
I don't understand your statement. Supply promises to increase in the future (how far in the future is up for debate) and demand is slacking off world wide. How would this not create a declining price?

And yes. A stronger dollar will help lower the price as well.
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My statement was more hyperbole that the insane increase in commodity prices has had more to do with a weak dollar than true supply/demand issues (which people were often stating).

You are correct though -- commodities, by definition, are supposed to be supply/demand driven and any increase in output and/or decrease in consumption will lower prices as well. Let's hope both work in tandem....
 
#981
#981
VolByBirth said:
My statement was more hyperbole that the insane increase in commodity prices has had more to do with a weak dollar than true supply/demand issues (which people were often stating).

You are correct though -- commodities, by definition, are supposed to be supply/demand driven and any increase in output and/or decrease in consumption will lower prices as well. Let's hope both work in tandem....
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broadly, commodity pricing was driven by contracts (quasi demand) as large investors were fleeing toward their old school inflationary hedges. In the end, the amount of capital seeking contracts soared through the ceiling and created a demand for paper that no longer reflected the demand for the underlying commodity. That type of anomaly happens in all publicly traded paper markets where psychology and expectations are as important as fundamentals. They all eventually, however, move back toward a proper equilibrium, since no amount of speculation can forever overcome the bounds of the base economic equations that rule business.
 
#982
#982
BigPapaVol said:
broadly, commodity pricing was driven by contracts (quasi demand) as large investors were fleeing toward their old school inflationary hedges. In the end, the amount of capital seeking contracts soared through the ceiling and created a demand for paper that no longer reflected the demand for the underlying commodity. That type of anomaly happens in all publicly traded paper markets where psychology and expectations are as important as fundamentals. They all eventually, however, move back toward a proper equilibrium, since no amount of speculation can forever overcome the bounds of the base economic equations that rule business.
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That sounds rather esoteric. Can we get the truncated English version?
 
#983
#983
Rasputin_Vol said:
That sounds rather esoteric. Can we get the truncated English version?
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markets, regardless of any overexuberance or chartist speculation, eventually reflect the underlying profitability of the companies or products that comprise them. We've now watched 3 distinct markets soar and collapse over the past decade, because they've all eventually had to revert to the fundamentals that drive them.
Posted via VolNation Mobile
 
#984
#984
BigPapaVol said:
broadly, commodity pricing was driven by contracts (quasi demand) as large investors were fleeing toward their old school inflationary hedges. In the end, the amount of capital seeking contracts soared through the ceiling and created a demand for paper that no longer reflected the demand for the underlying commodity. That type of anomaly happens in all publicly traded paper markets where psychology and expectations are as important as fundamentals. They all eventually, however, move back toward a proper equilibrium, since no amount of speculation can forever overcome the bounds of the base economic equations that rule business.
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So what are you thoughts: should the Fed start to increase rates to restore some value to the dollar (and lower impact of inflation) or just let the money flow out of commodities and let prices naturally fall (or both)?
 
#985
#985
Below $112 this AM. lowest level since early May...Gold below $800 that's a first this year. Nice moves to the down side.
 
#991
#991
Rasputin_Vol said:
What is this fool smoking? :crazy:

Forget $100 a Barrel - Oil Will Plummet to $30 - Seeking Alpha
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BigPapaVol said:
have you seen what the dollar's been doing?
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The probelm with this guys thinking is that we would continue to search and implement alternatives to oil when it becomes cheaper. Americans historically, will just go back to doing what they were doing before, SUV's will make a comeback and the nuclear industry will stall since no one wants to fight that hard against the greens. Same thing happened back in the 70's, if everything we inacted back then were still being implemented our cars would be getting 40 MPGs right now and nuclear would be more prolific.
 
#994
#994
MontereyVol said:
The probelm with this guys thinking is that we would continue to search and implement alternatives to oil when it becomes cheaper. Americans historically, will just go back to doing what they were doing before, SUV's will make a comeback and the nuclear industry will stall since no one wants to fight that hard against the greens. Same thing happened back in the 70's, if everything we inacted back then were still being implemented our cars would be getting 40 MPGs right now and nuclear would be more prolific.
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i do think suvs will make a comeback, but i don't think (baring a huge drop in the oil price) that americans will go back to what they are doing before. fuel economy will be an important part of any car made in the future. americans got "scared straight" here and i don't think that changes anytime soon.
 
#995
#995
Scared straight? Just like in the 70's.

Take oil at $30-65, and you will see americans acting like this was all a bad dream.
 
#996
#996
MontereyVol said:
Scared straight? Just like in the 70's.

Take oil at $30-65, and you will see americans acting like this was all a bad dream.
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I won't dismiss the idea that this might occur under those criteria but I simply can't imagine those prices ever coming to pass again, even at the top end.

The world has changed a bunch since the 70's.
 
#997
#997
droski said:
americans got "scared straight" here and i don't think that changes anytime soon.
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If we had really been scared straight, Reid and Pelosi would not be in charge and every sitting congressman would be running on a drill here, drill now agenda to keep his job. This has been an inconvenience for the most part.
 
#998
#998
allvol123 said:
If we had really been scared straight, Reid and Pelosi would not be in charge and every sitting congressman would be running on a drill here, drill now agenda to keep his job. This has been an inconvenience for the most part.
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pelosi has already backed down from her never ever ever stance. it's only a matter of time before they claim they always wanted offshore drilling and they were just misunderstood.
 
#1,000
#1,000
droski said:
pelosi has already backed down from her never ever ever stance. it's only a matter of time before they claim they always wanted offshore drilling and they were just misunderstood.
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I'm betting a "we were thinking of the children" is worked into the speech
 
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