Re: Energy Bears Do you get it yet?

Sure. Been in TGA for a century now and its STILL cant touch 7.50...like I posted a long time ago.
carolyn



Don Tiberone wrote:
From yahoo finance.

Energy Bears Do you get it yet?
by: panama_hopeful 04/19/06 10:48 am
Msg: 178504 of 179141

Do you get it yet? Do you understand what is happening? Its April. Peak
driving demand is far away. Opec is pumping flat out, and total petroleum
inventories have been dropping for a month.
Say it with me, one more time:

Opec is pumping flat out.
Total petroleum inventories are dropping.

2006 could be the biggest year in energy in a long, long time. There is NO
spare capacity. ZERO. Anyone who still quotes the 1-2 million bbls a day of
spare capacity is foolish. Demand and supply are in balance, and new demand
is growing faster than new supply...AT $70 US. So, clearly a new, higher
price will be needed to cause enough demand destruction to balance the rate
of new demand down to the rate of new supply.

CL Analysis
by: rodv1938 04/19/06 07:31 pm
Msg: 178667 of 179141

The numbers this week provide a mixed picture.
Crude oil short ratio last week finished at 45.08% which is near its lowest
level this year in six months. So the non-commercials are now decidely long.
This is bearish for far contracts and indeed they have underperformed
lately. But fron and near contracts are having a field day. So opportunity
is still there in the far contracts if you are among the peak oil faithful.
With emphasis shifting to the fron end of the curve the back/front ratio has
fallen to its lowest level in two months at 0.9587. This number was above
1.0 just a month ago - before Nigerian shortfall started to show up in the
weekly numbers. And the gold fair value for Dec 10 is at it's highest value
yet at $86.80.

Inventory of all product (including the SPR) was down 5.4 mb and shows that
even with demand down YOY and a strong contango in place supply is not yet
able to be balanced with demand. This is as bullish as it gets short of a
major disruption. The Nigerian shortfall is not enough to make up for the
supply short fall as it amounts to only about 3.5mb/week. And you can bet
that the 3.5mb is showing up just in our numbers. Think Brent Jun crude
being at $73.73 only 39 cents below WTI Jun. So everybody has to be under
stress. By the way OPEC spot closed at $65.80 today. Are they having fun?
Meanwhile the DOW finished up 10.

The latest news from SA and the Cantarell situation add to the growing story
of new production not being sufficient to breach the gap between supply and
demand. So denintex's train wreck seems to be happening as I type.
Sixteen months late but here nevertheless. Heck, in the scheme of things I'd
say he had it pretty well right (but you could have lost money in that
sixteen months).

So with the drill bit unable to rectify the supply situation price appears
to be the only short term remedy.

How high can it go?
by: boukha69 (99/M/The world) 04/20/06 05:33 am
Msg: 178719 of 179141

IMO another 5%. As long as there is no definite proof that these high prices
are affecting the economic growth, CL will continue to go up. How much
higher? By the amount that governments can lower taxes. I believe today
there is a big margin on taxes that governments can play with. In Europe
80%+ of pump prices are taxes. A couple of years back these governments were
blaming OPEC for high prices and calling them to increase production. Today
they know OPEC can no longer deliver more than they are already doing and
they are lowering taxes at the pump to keep people spending on other things.

A good friend of mine living in Belgium wrote to me that the Belgian
government compensated half of the increase in the cost of gasoline by
reducing the duty rates and they picked up the tab for everything over 50
cents per liter for heating oil. He has calculated that an average family in
Belgium is spending an extra 2000 Euros per year. With 90% of the people
living from pay-check to pay-check, something will have to give.

I have predicted here using my model that we'll see $77 by May (message
174278) before we drop back to $60 by year end. That fits well with 20% drop
predicted by TD yesterday. But then there is Iran, Nigeria, and Iraq for the
ultra bulls. For me the name of the game is still spare capacity. Iran,
Nigeria and other problems would not have had a great shock if spare
capacity still existed but at these high prices demand destruction will be a
main parameter in the equation for people to consider seriously.

If you're not already long for a while I will be hesitant to do so now at
these prices. From now to $75-77 if we get there I will be starting to
liquidate all my call options (some already showing 100%+ return) but will
keep my sand and service cos. I'm already up 50%+ for the year and the pig
will always get slaughtered. I will be returning to NG cos next month or
June before the hurricane season and after I see injection volumes for a
while.

The dollar scenario is playing out nicely and will keep my gold cos for the
time being.

Another Head Fake
by: rodv1938 04/20/06 03:11 pm
Msg: 4982 of 5027

According to the IEA OECD stocks fell in February.

"OECD total industry oil stocks fell by 13 mb in February as draws in
distillates and other products in the Atlantic Basin outpaced builds in US
and Pacific crude stocks."

This when Nigeria was still producing from the point of view of OECD stocks.
Nigeria went offline (455kb/d) on Feb 17, but that wouldn't show up during
Feb in OECD stocks.

Thus even with Nigeria producing full tilt the WW production was
insufficient to add to inventory. This slow drain on inventory (which still
has one day more of carry than last year - evidence of the power of
Contango) if not checked and soon will pressure prices to impose demand
restraint.

Still very bullish CL and unsure on NG. JMHO.

--
"Diversification is a protection against ignorance. It makes very little
sense for those who know what they are doing"

-- Warren Buffett

"We make money the old fashioned way. We print it."

-- Art Rolnick, Chief Economist for the Minneapolis Federal Reserve Bank



.