Wednesday, May 28, 2008
Oil is in a bubble. Yeah, course it is, Anatole
MoneyWeek: Oil is in a bubble. Yeah, course it is, Anatole
Whatever Anatole Kaletsky may claim in The Times, there is no oil bubble and no over-supply. Oil may be over-bought, there may be a correction coming, but the larger trend is upwards, says Dominic Frisby.
Posted by damien @ 12:44 PM (1432 views) Add Comment
33 Comments
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1. confused76 said...
a naive argument in Money Week
Like Britain is a small island and demand always outstrips supply
This journalist is rather misinformed about what really drives oil price
2. paul said...
Ooh I'm not quite so sure, confused. He does seem to have some pretty convincing historical evidence - he's not just spouting hyperbole (which is exactly what Kaletsky was doing).
3. sold 2 rent 1 said...
The oil market is a mass of conflicting ideas.
Throw in abiogenic petroleum origin and run your car on water conspiracy theories, and what do we really know?
4. shipbuilder said...
S2R1 - what we know is what is backed by evidence - the theories you talk of are just that - theories.
You can 'throw in' whatever you like - you could even make something up yourself - but don't try and pretend that they cast any doubt on actual facts.
There's probably hundreds more theories out there that you haven't discovered - what about them? Is what you believe really dictated by a few voices on the internet?
Why do you only post EXACTLY the same 'evidence' and theories as NWO conspiracy theorists?
You patronise others with your encouragement to 'search harder for thr truth', yet it is clear that you have done very little real searching yourself.
I feel obliged to post this, as I have posted before, becuase you are insulting people who have dedicated their lives to facts and evidence, are responsible for all the knowledge you hold dear.
You carry out these insults on the back of second-hand opinions from the internet.
5. drewster said...
@confused76: Pray do tell - what is really driving the oil price? Or are you keeping it a secret?
@s2r1: Both the abiogenic origin theory and the water-car story are wishful thinking. People don't want to have to face up to the reality of Peak Oil, just as they don't want to face up to the reality of HPC. Have a look at The Oil Drum.
6. confused76 said...
"@confused76: Pray do tell - what is really driving the oil price? Or are you keeping it a secret?"
The answer is quite simple: Goldman
http://seekingalpha.com/article/77764-oil-bubble-how-speculation-may-contribute-to-recent-moves-in-oil-prices
7. James said...
sipbuilder - I've been away for a while - glad to see the torch of reason remains lit!
8. sold 2 rent 1 said...
shipmate,
The abiogenic petroleum origin arguments can be seen here
The http://en.wikipedia.org/wiki/Abiogenic_petroleum_origin
The Stanley Meyer's water fuel cell arguments can be seen here
http://en.wikipedia.org/wiki/Stanley_Meyer%27s_water_fuel_cell#Meyer.27s_water-fueled_car
I think you will find that these people have dedicated their lives on their research against mainstream opinion and other "dark" forces.
Ask yourself these querstions.
How much have you learnt about money/debt in the last 18 months?
Why were we never taught anything like this in school/university?
Money/debt is the basis of our civilisation. It is such an important topic.
Why are mainstream media outlets only beginning to reveal the flawed monetary system now the crisis is beyond being fixed without immense pain?
Now ask yourself, do we really know anything?
Reality is just our individual perception.
Perceptions have a great deal of inertia.
But when they change, they can change fast.
Think about how perceptions of reality changed when Rome fell.
This is the level we are getting close to.
9. Andrew said...
the main point of his article is inflation, not oil. Oil is just one of many things that have double in price recently (rice, bread, pasta, metals). they have doubled in price not because of supply/demand issues, but because the money we are using to buy it is becoming worth less and less.
10. drewster said...
s2r1, the water car as described in your link is scientifically impossible. Any A-level chemistry student could tell you that. These people aren't fighting against any dark forces. They're charlatans, fraudsters, con-men, snake-oil salesmen who just want money and/or fame.
The abiogenic petroleum theory is harder to disprove. However even its most fervent supporters agree that the oil it produces is deep in the earth's crust and very difficult to obtain. Overall, the theory smacks of wishful thinking.
11. sold 2 rent 1 said...
drewster,
How do you explain the 9 patents granted by the US Patent Office
http://en.wikipedia.org/wiki/Stanley_Meyer%27s_water_fuel_cell#Patents
12. James said...
How entirely predictable. s2r1 responds to a very well judged critique of his muddled thinking with yet more muddled thinking and obfuscation. Hint - s2r1, if you're forced to link to wikipedia to back up an argument - and that wikipedia article includes a link to a clear disproof of that argument - you've lost.
I've resolved to post less as s2r1 (and his little cheerleader malct) are just a bad joke. What they miss in all their arguments is any semblance of logic or reason (which they defend as having their 'consciusness changed') thereby making it utterly pointless to argue with them. Ironically, they are the true sheep, following whatever nonsense anyone writes on the internet.
Don't worry though, I'll definitely be around at the end of June to point out that the gold price is closer to the consensus prediction, than s2r1's ($1500).
13. last_days_of_disco said...
Hey, seen as we are all throwing in our opinions. I think that oil is just coming back to roughly the correct price, its overshooting a bit, but it has been artificially held down by the credit/housing bubble -- well actually, its been that our fiat currencies have been over valued and now the reality is setting in.
I don't think oil really changes in price. I think we just inflate and deflate our currencies and that is what really causes the price changes. The supply/demand arguments are interesting but those will cause slow change over time. Demand doesn't change that quickly (world wars have a quicker impact, but that isn't happening).
The price spike we are seeing has one cause, devaluation of the dollar and the pound. Everything else is trivial in comparison. I really believe oil is a total red herring. Inflation is the direct consequence of the BOE printing money and the interest rates being too low.
Welcome to paying for the 100bn that has been blown on keeping the credit markets liquid and keeping people who should be repossessed in their homes, hope you like paying for them. This won't work, there are just too many to try and save.
The reality is *we* even are in denial about how badly we are screwed. Oil prices will probably double as our currency collapses as
we try and save our buddies in houses they can't afford.
OPEC is right to be bemused by the remarks of various western leaders.
What we are seeing is people talking shite because they don't realise how utterly stuffed we are.
We are in the denial phase.
14. icarus said...
Getting back to the oil price. Lots of factors, many to do with dollar devaluation and associated speculation, some to do with cost of supply, then there are subsidies in much of the developing world that artificially support demand etc. But one thing it ain't, Broon take note, is OPEC turning off the taps.
15. James said...
s2r1 - you don't know what the patent office is or does if you think granting of a patent proves anything. Go learn, be humbled, return.
16. icarus said...
Oh, and supply shortages via refinery capacity as he says in the article.
17. drewster said...
s2r1, the US Patent Office is notorious for allowing any old claims. Inventors don't have to build the devices in question in order to patent them, and the patent office certainly doesn't waste its time trying to build them.
Here are some other spurious patents:
U.S. Patent 5,443,036 , "Method of exercising a cat"
U.S. Patent 6,004,596 , "Sealed crustless sandwich"
U.S. Patent 6,960,975 , "Space vehicle propelled by the pressure of inflationary vacuum state"
The last one also involves violations of the laws of physics.
(source: http://en.wikipedia.org/wiki/US_Patent_Office#Criticisms)
18. shipbuilder said...
S2R1 – I’m not sure if you are deliberately blurring the line between fact and fiction for your own purposes, or if you just don’t see it.
To answer your questions –
What have I learnt? I have learnt a lot about our monetary system/Federal Reserve and so on in the last 18 months – all reliable sources and widely available historical fact – not ‘hidden’ in any way – so why do you and others on here try to dress it up as a big secret?
Why are we not taught it? Well, if you did Economics, you were. As for the historical aspect – we can’t be taught everything. Who knows why not? If something is not on the History curriculum, does that make it shadowy ‘hidden’ knowledge? All I know is that the information is there, widely available from credible sources, if you look for it.
Why are the media not picking up on it? We know that the media mainly report what is in their interest and the interest of their owners – that’s not anything new. Again, the point is that the information is still available to those who want it, not ‘hidden’ in any way.
Please stop presenting widely available fact alongside nonsense theories and passing them off as some ‘truth’ known only by the few. You damage the credibility of the fact, rather than raise that of the fiction.
19. James said...
shipbuilder - I would only vary slightly from your last post - the media also report what's in the public's interest. Maybe mostly, but perhaps not *enttirely* self serving.
20. last_days_of_disco said...
@icarus
I don't buy the refinery shortage argument. That is based on the idea of ever increasing demand. In an economic crash demand falls away quite spectacularly. So when the guy who said, we are running out of capacity made his pronouncements (sounds like a sensible sort of chap) he wasn't anticipating a credit crunch and a shrinking economy -- nobody was.
The ever expanding, increasing economy idea is so firmly rooted in our consciousness, that we can't imagine an economy that goes the other way. We will have excess capacity once the economy has well and truly crashed. We still think life is going to go on as it did before. There is no chance of that. What happened in 1929/30?
This is like the dot com companies saying, it will be tough, but we can get through this. I can sense the same fragile hope in the air. We will be ok, someone else will go bankrupt, not me, etc, etc. With dot com it was just a bunch of techies and greedy investors, this time its way bigger.
Its being so cheerful that keeps me going as my mom says. :-)
21. Delboypass said...
What OPEC fails to understand is that if they dont give us oil then they had better get their armies ready...
I could see America going all out on any middle eastern country with oil and this time not like Iraq but violently to take control over countries...
Iraq, Iran, Saudi, Africa, nigeria...
It will become fight or die scenario without oil and with these countries currently banning outside involvement, all end in tears...
OPEC did the same before North Sea oil was discovered leading to Oil prices reducing..now they are a big cartel wallowing in profits...
Time to take military action...and build nuclear power plants as a side activity just in case..
22. lvmreader said...
In Defence of Currency
This is why we needed a sensible interest rate policy 3 years ago. I remember about 18 months ago some people who asked me why I kept posting this, in addition to Dorothy, Kansas, Bye Bye.
I think we can all see what the end result of printing money (by fractional reserve banking, extending credit) is. Who cares about a house price crash when our currency will do well to be worth 30% of its current value by 2012?
23. Baroo said...
James @ 19: (and off topic)
Unfortunately there are strong filters on what counts as "public interest" in the media. For example all mass media is funded by advertising and so you can't print or broadcast material that will put off the kind of people that advertisers want to reach, i.e. people with money to spend.
24. sold out said...
Ivmreader@22
"Who cares about a house price crash when our currency will do well to be worth 30% of its current value by 2012?"
Comments like this scare the sh#t out of me,although i dont dispute them for one second.What can we do,if we have STR and are waiting to buy into the market when it hits bottom (2011 is my guess).The more i read stuff on here the more i am starting to believe i should jump in to the property market a lot sooner.What else can i do?
25. sold 2 rent 1 said...
sold out,
BUY GOLD - real money
26. sold 2 rent 1 said...
James,
"I've been away for a while "
Were you on an emergency "common purpose" course?
The time is getting close for you guys to be rumbled.
You must be panicking now.
6 July 2008 - not long now for world consciousness to change
27. sold 2 rent 1 said...
last_days_of_disco,
We are at the end of a 300 year debt cycle.
The crash will be bigger than anyone can imagine.
The good news is that for those of us who survive this evolutionary test, we end up with global enlighenment in 2011/2012
28. shipbuilder said...
S2R1, you believe that the crash will signal the end of money, financial collapse like we have never seen. Given that scenario - how exactly do you see gold acting as a store of wealth? Will you have it actually at hand, as opposed to a vault somewhere? What will you exchange it for? At the moment, few people in the western world have huge assets or savings - on a world scale the % of people with savings of any great amount is miniscule - I imagine less than 5%. How will this be an evolutionary test, if no-one has wealth to be wiped out?
29. mark wadsworth said...
I think (on the basis of hunch more than anything) that oil is ridiculously overpriced. If it fell back to $50/barrel in a year's time, that would surprise me no more than if it hit $200.
For sure, oil will become progressively more expensive over time relative to other stuff (as LDOD points out) but that's as useful as saying that one day, a three-bed semi in Cleckheaton will be worth £1 million one day. Of course it will - the question is, will that be in five or fifty years time?
30. sold out said...
S2R1, thanks for the advise regards buying Gold.I may well shift some of my savings into gold very soon as a hedge against inflation/currency devaluation.But all i really want is decent home for my family without being enslaved by the banks.Is that too much to ask? I don't really understand, if you believe we are going into a complete monotery meltdown the likes we have never seen before,then like shipbuider says what will you exchange it for?Am i missing something here?
31. sold 2 rent 1 said...
ship,
P4AC talked about gold becoming a de facto standard.
You don't need lots of money to open a bullionvault account. I think you can buy 1 gram.
All it would take is for bullionvault et al to add payment/transfer facilities to their website functions and hey presto you have the beginnings of a de facto banking system, where money is VALUE and not debt.
As for the final evolutionary test in 2011, individual wealth will not be the deciding factor on who passes or fails.
I am guessing that those who can co-create together without any money at all will pass the test.
Remember we have 2 levels of consciousness to go through before enlightenment. The first will require gold at its core, the second won't require gold at all. These are difficult concepts to grasp.
32. drewster said...
@Mark Wadsworth (the only HPC blogger to use his real name?),
In 2003 I had a hunch that houses were overpriced. Hunches aren't enough - there are no clear reasons why oil couldn't go higher, the current price spike has had virtually no effect on consumption.
33. James said...
s2r1 - ahh, yes, just go straight for the ad hominem, eh?
"Were you on an emergency "common purpose" course?"
No... I was moving (rented) house. As previously mentioned, I'm not common purpose and I have no idea whether your allegations about that group are true. I suspect they're nonsense - most of what you say is.
"The time is getting close for you guys to be rumbled."
Which guys? See above?
"You must be panicking now."
Not really, no. 16th May - nothing extraordinary happened. Gold won't be at $1500 at the end of June. I'm feeling pretty confident my predictive capabilities are a shedload better than yours.
"6 July 2008 - not long now for world consciousness to change"
I thought that was 16th May?!
s2r1 - you're nothing more than a nasty little joke. You have no special insights and nothing to contribute to a rational discussion.