Comments on: Mr. Market Gets It Wrong Again http://www.aspousa.org/index.php/2009/05/mr-market-gets-it-wrong-again/ Truth in Energy Thu, 09 Feb 2012 01:11:56 +0000 http://wordpress.org/?v=2.6.2 By: The Almighty Dollar :: ASPO-USA: Association for the Study of Peak Oil and Gas http://www.aspousa.org/index.php/2009/05/mr-market-gets-it-wrong-again/#comment-3063 The Almighty Dollar :: ASPO-USA: Association for the Study of Peak Oil and Gas Thu, 03 Sep 2009 17:31:08 +0000 http://www.aspousa.org/?p=1688#comment-3063 [...] Oil moves with the S&P 500, so the oil price is phony too. (See my Mr. Market Gets It Wrong Again.) [...] [...] Oil moves with the S&P 500, so the oil price is phony too. (See my Mr. Market Gets It Wrong Again.) [...]

]]> By: Random Links LVIV « Random Musings of a Deranged Mind http://www.aspousa.org/index.php/2009/05/mr-market-gets-it-wrong-again/#comment-2688 Random Links LVIV « Random Musings of a Deranged Mind Wed, 24 Jun 2009 01:22:02 +0000 http://www.aspousa.org/?p=1688#comment-2688 [...] http://www.aspousa.org/index.php/2009/05/mr-market-gets-it-wrong-again/ [...] [...] http://www.aspousa.org/index.php/2009/05/mr-market-gets-it-wrong-again/ [...]

]]> By: Bad Signs, New Bubbles :: ASPO-USA: Association for the Study of Peak Oil and Gas http://www.aspousa.org/index.php/2009/05/mr-market-gets-it-wrong-again/#comment-2667 Bad Signs, New Bubbles :: ASPO-USA: Association for the Study of Peak Oil and Gas Thu, 18 Jun 2009 14:31:57 +0000 http://www.aspousa.org/?p=1688#comment-2667 [...] rise in oil prices (and commodities generally) driven by speculation that I described in Mr. Market Gets It Wrong Again is now the conventional wisdom among observers who aren’t directly vested in blowing a new [...] [...] rise in oil prices (and commodities generally) driven by speculation that I described in Mr. Market Gets It Wrong Again is now the conventional wisdom among observers who aren’t directly vested in blowing a new [...]

]]> By: The Decline of the American Empire :: ASPO-USA: Association for the Study of Peak Oil and Gas http://www.aspousa.org/index.php/2009/05/mr-market-gets-it-wrong-again/#comment-2599 The Decline of the American Empire :: ASPO-USA: Association for the Study of Peak Oil and Gas Fri, 05 Jun 2009 01:53:51 +0000 http://www.aspousa.org/?p=1688#comment-2599 [...] note: I described the current speculation in oil in Mr. Market Gets It Wrong Again. I described how traders who are all doing the same technical analysis act in concert to drive the [...] [...] note: I described the current speculation in oil in Mr. Market Gets It Wrong Again. I described how traders who are all doing the same technical analysis act in concert to drive the [...]

]]> By: The Bellows » It’s 2007 All Over Again http://www.aspousa.org/index.php/2009/05/mr-market-gets-it-wrong-again/#comment-2574 The Bellows » It’s 2007 All Over Again Mon, 01 Jun 2009 13:21:57 +0000 http://www.aspousa.org/?p=1688#comment-2574 [...] as Dave Cohen notes, the additional drops in consumption from the major industrialized countries since the start [...] [...] as Dave Cohen notes, the additional drops in consumption from the major industrialized countries since the start [...]

]]> By: Supply, Demand, and the Price of Oil http://www.aspousa.org/index.php/2009/05/mr-market-gets-it-wrong-again/#comment-2571 Supply, Demand, and the Price of Oil Sun, 31 May 2009 20:35:38 +0000 http://www.aspousa.org/?p=1688#comment-2571 [...] as Dave Cohen notes, the additional drops in consumption from the major industrialized countries since the start [...] [...] as Dave Cohen notes, the additional drops in consumption from the major industrialized countries since the start [...]

]]> By: Dave Worth http://www.aspousa.org/index.php/2009/05/mr-market-gets-it-wrong-again/#comment-2542 Dave Worth Tue, 26 May 2009 08:28:49 +0000 http://www.aspousa.org/?p=1688#comment-2542 Dave's figures of 100 million barrels of oil being stored on the high seas sounds incredibly large but is just 1.5 days of world consumption, or a 1/7th of US's strategic reserve, or 1/4 of China's. So quite easy for WTI to be disconnected from oil being stored, IMHO. Dave’s figures of 100 million barrels of oil being stored on the high seas sounds incredibly large but is just 1.5 days of world consumption, or a 1/7th of US’s strategic reserve, or 1/4 of China’s. So quite easy for WTI to be disconnected from oil being stored, IMHO.

]]> By: Burt http://www.aspousa.org/index.php/2009/05/mr-market-gets-it-wrong-again/#comment-2532 Burt Mon, 25 May 2009 10:45:04 +0000 http://www.aspousa.org/?p=1688#comment-2532 Hello, I like your postS, i usualy don't answer. By Definition Market is ALWAYS wrong, this is ONLY speculation done by the all world. There is NOTHING rational in it on the short term. But what could interest me VERY much would to receive from you OR the difference between the economic value you give to the oil and the price of the market and this on the long term (at least 10 years), OR the same thing in an Excell format Regards and thank you for your different writings One answer(among several) to Don: I agree that Economy (it should be a plural, because there are several incompatible views) doesn't give the clue of our world (why should it, nobody does), but it highlights some risks and when you know the theorIES you know a little bit better where we are (only a little bit, not more.. having a bad sight is better that being blind, no?) It helps to THINK not to have any kind of truth in its little and poor hands, and this has nothing to do with "why the politics listen ONLY to some economists?" an "where is the reality? (not with M.Market anyway)" Hello, I like your postS, i usualy don’t answer.
By Definition Market is ALWAYS wrong, this is ONLY speculation done by the all world. There is NOTHING rational in it on the short term.
But what could interest me VERY much would to receive from you OR the difference between the economic value you give to the oil and the price of the market and this on the long term (at least 10 years), OR the same thing in an Excell format

Regards
and thank you for your different writings

One answer(among several) to Don: I agree that Economy (it should be a plural, because there are several incompatible views) doesn’t give the clue of our world (why should it, nobody does), but it highlights some risks and when you know the theorIES you know a little bit better where we are (only a little bit, not more.. having a bad sight is better that being blind, no?)
It helps to THINK not to have any kind of truth in its little and poor hands, and this has nothing to do with “why the politics listen ONLY to some economists?” an “where is the reality? (not with M.Market anyway)”

]]> By: rick http://www.aspousa.org/index.php/2009/05/mr-market-gets-it-wrong-again/#comment-2531 rick Mon, 25 May 2009 10:32:11 +0000 http://www.aspousa.org/?p=1688#comment-2531 One thing that is certain: the Free Market's Supply and Demand theory does not apply to crude oil. One thing that is certain: the Free Market’s Supply and Demand theory does not
apply to crude oil.

]]> By: Paul Dvorkis http://www.aspousa.org/index.php/2009/05/mr-market-gets-it-wrong-again/#comment-2523 Paul Dvorkis Sun, 24 May 2009 06:34:52 +0000 http://www.aspousa.org/?p=1688#comment-2523 I think I can point out where you got it wrong in your article about where oil price are wrong: In the last few years, investment money made oil a legitimate investment vehicle. Now we have to think about oil as a stock and a cyclical one. Anybody know that a cyclical stock peak when it's earning are worst and it bottom when earning are best. A similar situation with oil means oil should peak when inventories are worse. Well it did not happened yet but it is close enough. Now like a stock oil respond more to expectation about future supply / demand and not to actual supply demand now. The rise in 2008 was cause by expectation that India and China growth will make demand bigger than supply. It actually happened for a while, but then the mortgage/ banking leverage USA fiasco exploded and the world was about to go into a great depression (a 85-90 VIX, that was observed last year, was seen only in the great depression). This is why oil collapse to $35. Now expectation are for a normal recession, which has not ended yet, but which should end soon so oil is up to $60: In view of peak oil which both of us believe in- only now oil behave normally while for the last 50 year it did not as it ignored completely the fact that oil is not renewable and price responded only to actual supply/demand and not to future oil scarcity. I would appreciate if you post this as a response to your article since I tried to do that but could not find a place to post a reader comment. Sincerely . Paul Dvorkis . P.S.Another point: all those floating tankers contain oil which was already sold through the future markets. It was a safe bet to buy at $35 last year and to sell at $50-60 in 09 and all you need to do is store the oil for 6-9 months. I do not believe shell did not do it; what happened is that today's price are higher than what they were promised a few months from now so why keep storing. Point is if they cannot sell,they will just wait till their future delivery is expected and they will deliver then. This can prevent future oil price rising but I doubt it- it is about one day of oil usage which is stored at sea so it should not mean much. Anyhow to assume that dumping all this oil will bring down oil price BELOW last bottom-will never happened : those stored barrels have a future buyer at higher price (caused by contango) which means they can be delivered as promised (that is the point of having future market where one can sell or buy oil for future delivery...) I think I can point out where you got it wrong in your article about where oil price are wrong: In the last few years, investment money made oil a legitimate investment vehicle. Now we have to think about oil as a stock and a cyclical one.
Anybody know that a cyclical stock peak when it’s earning are worst and it bottom when earning are best. A similar situation with oil means oil should peak when inventories are worse. Well it did not happened yet but it is close enough. Now like a stock oil respond more to expectation about future supply / demand and not to actual supply demand now.
The rise in 2008 was cause by expectation that India and China growth will make demand bigger than supply. It actually happened for a while, but then the mortgage/ banking leverage USA fiasco exploded and the world was about to go into a great depression (a 85-90 VIX, that was observed last year, was seen only in the great depression). This is why oil collapse to $35.
Now expectation are for a normal recession, which has not ended yet, but which should end soon so oil is up to $60: In view of peak oil which both of us believe in- only now oil behave normally while for the last 50 year it did not as it ignored completely the fact that oil is not renewable and price responded only to actual supply/demand and not to future oil scarcity.
I would appreciate if you post this as a response to your article since I tried to do that but could not find a place to post a reader comment.
Sincerely .
Paul Dvorkis .
P.S.Another point: all those floating tankers contain oil which was already sold through the future markets. It was a safe bet to buy at $35 last year and to sell at $50-60 in 09 and all you need to do is store the oil for 6-9 months.
I do not believe shell did not do it; what happened is that today’s price are higher than what they were promised a few months from now so why keep storing. Point is if they cannot sell,they will just wait till their future delivery is expected and they will deliver then.
This can prevent future oil price rising but I doubt it- it is about one day of oil usage which is stored at sea so it should not mean much. Anyhow to assume that dumping all this oil will bring down oil price BELOW last bottom-will never happened : those stored barrels have a future buyer at higher price (caused by contango) which means they can be delivered as promised (that is the point of having future market where one can sell or buy oil for future delivery…)

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