Reason Behind CL and Peak Oil Confusion in Press

I'm not necessarily saying there is a conspiracy. However, ask yourself what would happen if peak oil was formerly acknowledged and publicized? What about the US and world's FIAT currency system? Just how important is oil to the economy and modern life? Where would people suddenly park their FIAT currency or store their "wealth"? What would many national oil producers do with their supplies and exports? I can tell you that many would leave financial assets at a faster rate and consider oil in the ground as a store in value at a more rapid rate than what's going on. The truth is out there. Peak oil is here and has been for almost two years. There will be corrections, though. It's easy money and I'm surprised so many here don't even care about oil stocks or trading other related issues--in fact most are trying to short.

The problem is actually not whether the markets hit the peak oil or not, the issue is the growth rate of consumption with the increased demand from China is probably now getting larger than the growth rate of the reserves. This is enough to push the prices higher until the nations slow down their consumption to sustainable levels and it probably won't happen anytime soon. I'd like to see somebody verify both growth rates though...

arbman... CL production is flat to down over the past two years...fact. Most data is stated as BOE or barrels of oil equivalent which inlcudes NG and NGL. Even this number is flat. It's why NG is selling for a huge BTU discount over CL despite being a cleaner fuel. There are so many pieces of circumstantial evidence out there for being past peak oil but no one wants to believe. There are so many managers who manage hundreds of billions that are underinvested in energy cause they think it's a bubble or past peak in CL pricing and CL will plummet. This is the makings of a powerful LT trend in CL and alt energy stocks.....and it's why the trends has been up for years. For gosh sakes, these stocks have been leading the market for a couple of years. See the forest and not the tree. There is NO sign of a peak on these charts. The irony is many of the energy indexes are composed of US refining capacity and it's making things look a LOT more bearish for energy stocks than what reality is. E&Ps are en fuego right no. Drillers have been doing nicely, too. I'll bet I read another dozen "going short CL, XLE or OIH" posts over the next week. The irony is that the valuations on these stocks are well below market multiples and the sector is now beginning to accumulate lots of cash. Internet stocks went moonward in the face of insane valuations.

Edited by Cirrus, 07 May 2008 - 11:34 AM.

China rumored to be huge buyer in back month oil contracts 2009-2012.

Digging for Oil to shore up retirement

http://www.amazon.co...l/dp/1594201676

It's easy money and I'm surprised so many here don't even care about oil stocks or trading other related issues--in fact most are trying to short.

Except for those who are bull and bear agnostics, it seems the main bias on this board is short. That's why I rarely, if ever, post longs. Especially longs with strong uptrends and great fundamentals. That just gives the shorts ideas.

I've never understood why shorts pounce on strong uptrending stocks vs weak ones ready to break support. But what the hell do I know?

I'm with you marco. Unless it's a day trade I seldom short stocks near 52 wk or ATHs. I learned that lesson painfully years ago.

There is NO sign of a peak on these charts.

It is a weakening economy with very high commodity prices, I would not be surprised if the demand starts tapering off a bit while every reserve gets drilled to bring that oil to the markets at $120 per barrel. It should contain the oil prices at some point. The technicals are telling us about a parabolic trend in place and I would not sell the commodities or the related sectors short unless I get very high probability trades like I did last week (95%) for a short term trade only...

I sound a bit bearish, not really. Until the Fed makes the decision to cool down the economy and increase the unemployment, the commodities are more bullish than the equities for a while. But the commodities do correct too. For VLT, the economy will switch to alternative energy sources eventually and it is not ethanol, it is probably nuclear, solar and wind. This switch should largely happen due to the frustration with the persistently high oil prices over the next decade...

I'm with you marco. Unless it's a day trade I seldom short stocks near 52 wk or ATHs. I learned that lesson painfully years ago.

Yep. Almost every stock that's down and looks cheap has another 10% or more downside. At least it sure looks that way to me. Meanwhile, a really strong stock might have something going on in it and infinity can be a long way away.

My dad's hedge fund clients used to love shorting stocks near or at their lows--in size. He'd work the order all day, and then hit the bid (on OTC) during the last 15 minutes.


Mark

Thanks Mark...interesting story. Shorting is a lot easier when stocks are headed down. It takes big money a long time to get out of a stock "once something goes wrong." I believe it was Livermore who said something like "the way of Wallstreet was to take stocks way beyond where they should go on the upside and unload on those who think they're getting a bargain."