Thread: Oil Tumbles as Signs of Slowing Economy Spur Commodity Selling

Originally Posted by Butterfly

are you fucking real ?

Oh yes. And that is the problem (for you).

Right-oh. As Butterfly hangs his head in shame, mia noi beckons. I believe the french call this Sept-a-huit.

^ still waiting for your explanation of price elasticity, you kept ignoring my request for a rebuttal and further explanation of your silly comments, while claiming some kind of "imaginary" victory

Originally Posted by bkkandrew

As Butterfly hangs his head in shame, mia noi beckons

Originally Posted by Whiteshiva

Not really, demand will always equal supply because the price of the commodity adjusts automatically to keep the two in balance

yes and no, Demand will intersect Supply at the equilibrium price, but changing price will be determined by changes in the demand curves or the supply curves. If supply shifts, with a constant demand, price will adjust. At the end, less quantity is served by supply as everyone can't afford the high price, only those who value the commodity the most. Very simple. And we are seeing it now.

Originally Posted by Whiteshiva

Which I think is over-simplifying the mechanisms at work to the extent where it doesn't really tell you anything.

It just tells you facts, nothing else, not projected opinions or other creative ideas

Originally Posted by Butterfly

Originally Posted by bkkandrew

Now, we can see that the number of cars in China has increased 53% from 2005 to 2007. Yet in the same period oil production has decreased by 0.036%. This significantly is the period of the large rise in oil prices.

So is Butterfly right that production is rising in tandem with demand?

great now you are confusing growth rate of supply and demand, with quantities of supply and demand, you can't make that shit up

No confusion. Unless you are suggesting that the 53% increase doesn't, er, represent an in increase. Perhaps in Butterflyworld...

Originally Posted by Butterfly

The growing supply of oil (note, it doesn't say rate) match growing demand. Is demand served by supply ? yes, is demand growing faster than supply, probably, but as long as supply serves demand, everything is fine. A growth rate is NOT quantity, and is irrelevant in the price equilibrium of demand and supply. That's what you are failing to understand, and you keep barking at the wrong tree.

What a load of nonsense. Typing 1000 random words will not get round the fact that between 2005-7 oil supply dropped.

The only actual disagreement you could logically have is that the figures are wrong. Have you got any evidence to support this?

Originally Posted by Butterfly

Originally Posted by bkkandrew

So are the cars 'real' or 'imaginary'?
Will they produce 'real' or 'imaginary' demand for oil?

See my post above, you are confusing growth rate and quantities. As long as all those cars are being served,

No, I'm not confusing anything. I was asking whether the cars were real or imaginary. I note you have not answered this.

Originally Posted by Butterfly

there is no problem. Forecasting price based on growth rate is exactly the problem here, and explain the speculative moves we are seeing on the oil market. At the current rate, the "insignificant" downfall could become significant in the FUTURE. But speculators forget about price elasticity and how demand and supply reacts and adjust to higher prices. This will lead eventually to a revision of the growth rate and lower expectations of future oil price. And this is probably what we are seeing already.

You would talk about anything than addressing the points raised. Ladyboys anyone?

Originally Posted by Butterfly

^ still waiting for your explanation of price elasticity, you kept ignoring my request for a rebuttal and further explanation of your silly comments, while claiming some kind of "imaginary" victory

Explanation given, repeated, reposted twice by Whitesilva and ignored/misunderstood by you.

Originally Posted by Butterfly

Originally Posted by bkkandrew

As Butterfly hangs his head in shame, mia noi beckons

I know, it must be quite humourous to you - the idea of sex with an attractive woman.

Originally Posted by Butterfly

Originally Posted by Whiteshiva

Not really, demand will always equal supply because the price of the commodity adjusts automatically to keep the two in balance

yes and no, Demand will intersect Supply at the equilibrium price, but changing price will be determined by changes in the demand curves or the supply curves. If supply shifts, with a constant demand, curved right, then left, price will adjust. At the end, less quantity is more quality and is served by supply as everyone can't afford the high price, only those who value their sanity the most. Very simple. And we are seeing it now.

Originally Posted by Whiteshiva

Which I think is over-simplifying the mechanisms at work to the extent where it doesn't really tell you anything.

It just tells you facts, nothing else, not projected opinions or other creative ideas/fiction from Butterflyworld

Well the facts are, as they stand, that Sweet Crude finished at $131.55 and Brent at $131.64.

German carmaker Volkswagen posted record first-half sales thanks to a boost in deliveries to China.
Global deliveries were up 5.8% to 3.27 million vehicles, with China taking 531,600 vehicles, an increase of 23.6%.

Taken from:

BBC NEWS | Business | China drives VW sales to record

^ Yes, more cars to china to driven, and these cars require oil. A lot of attention in the US media on US consumption and US oil output in ANWAR and off-shore which is years away, if it even makes it to market. Very little mention of the global increased demand. Looking inward too much, once again, me thinks.

Originally Posted by bkkandrew

What a load of nonsense. Typing 1000 random words will not get round the fact that between 2005-7 oil supply dropped.

The only actual disagreement you could logically have is that the figures are wrong. Have you got any evidence to support this?

As predicted, you keep ignoring the arguments and fail to answer anything substantial. You exposed yourself as a complete fraud with your price elasticity cockup, and instead of answering or explaining yourself about it, you keep reposting the same post over and over, claiming it's an explanation, while in fact, it's just a repost. Your only objective here is to go in circles and avoid all questions as you have no interest in a serious discussion, just telling "I won, I won, I won" to everyone that can hear you. I proved you were completely misguided in your assumptions but of course you can't accept that as you are a complete psycho.

I am only a sucker for believing you were interested in anything other than trolling. Discussing econ 101 with you is like talking to a drunk Thai guy who claim that 2+2=5, there is nothing you can say that will educate him, or engage him in anything serious other than drunken non-sense. Unless you seriously answer your "price elasticity" cockup, I don't see any point discussing anything serious with you.

In the meantime, you can always claim your "imaginary" victory, that only a fool would have the urge to do when losing an argument

^I notice that you are restricting yourself you going round in circles on an esoteric and largely irrelivant point now, rather than commenting on the main issues, namely:

Demand from China/India is massively up and continueing to rise hugely;
Supply is flat/maginally declining.

Given these, the price can only rise until demand is restrained. Guessing the price point at which that happens is the central question. This is unless production can somehow be increased to make up some of the 4.3% long-term lag at 2007 levels.

Predictably, another red from the failing, flailing, squirming Butterfly.

Pathetic.

Back on track you two. Stop waving your cocks for a minute.

Crude Oil Falls as Storm Forecast to Miss Gulf Production Areas
By Christian Schmollinger



July 22 (Bloomberg) -- Crude oil fell in New York as forecasters said a storm in the Gulf of Mexico will probably miss the main U.S. production areas, easing concern that supplies will be disrupted.
Dolly is predicted to come ashore on July 23 near the Texas border with Mexico, south of the part of Gulf of Mexico that accounts for about 25 percent of U.S. oil output, the National Hurricane Center said at 11 p.m. Miami time. U.S. crude-oil supplies probably dropped last week as near-record prices discouraged buying by refiners, according to a Bloomberg News survey of analysts.
``The market washes these events out pretty quickly so unless it really flares up into something serious the market will see through it,'' said Mark Pervan, a senior commodity strategist at Australia & New Zealand Banking Group Ltd. in Melbourne.
Crude oil for August delivery fell as much as 77 cents, or 0.6 percent, to $130.27 a barrel on the New York Mercantile Exchange. It was at $130.59 a barrel at 12:12 p.m. Singapore time. Futures are up 75 percent from a year ago.
Yesterday, oil rose $2.16, or 1.7 percent, to settle at $131.04 a barrel. It was the first increase in five days. The August contract expires today. The more-active September futures declined 16 cents, or 0.1 percent, to $131.66 a barrel at 11:47 a.m. Singapore time.
Oil settled at $128.88 on July 18, the lowest close since June 5. Prices dropped 11 percent last week, the most in more than three years, on signs of slowing global economic growth and faltering U.S. fuel demand.
Dolly's Winds
Brent crude oil for September settlement fell as much as 71 cents, or 0.5 percent, to $131.90 a barrel on London's ICE Futures Europe exchange. It was at $132.35 a barrel at 11:44 a.m. Singapore time. The contract yesterday rose $2.42, or 1.9 percent, to settle at $132.61 a barrel. Prices climbed to a record $147.50 on July 11
Dolly's tropical storm-force winds extend outward as far as 200 miles and the storm, moving toward the west near 17 miles per hour, is expected to gradually decrease forward moving speed, the hurricane center said. The center of the storm was about 435 miles (695 kilometers) southeast of Corpus Christi, Texas.
``There's a very strong shot that we can get back to $150,'' Jonathan Kornafel, Asia director at Hudson Capital Energy in Singapore, said in an interview with Bloomberg Television. ``We're really just one hurricane away.''
Exxon Evacuates
Exxon Mobil Corp., the world's biggest energy company, said it started evacuating workers from oil and gas wells in the Gulf of Mexico before Tropical Storm Dolly arrives. There has been minimal production impact for Exxon, the company said in a statement today.
Royal Dutch Shell Plc, Europe's biggest oil company, has started evacuation of personnel from oil platforms in the Gulf of Mexico because of the approaching storm. The company removed about 125 people from its operations in the western part of the Gulf July 20, and was planning to evacuate another 60 yesterday, it said in an e-mailed statement.
``No further evacuations are planned at this time after yesterday, and based on current information and forecast we do not expect any impact on Shell-operated production in the Gulf of Mexico,'' The Hague-based Shell said.
No oil or natural-gas production has been shut as a result of the approaching storm, the Minerals Management Service, part of the U.S. Interior Department, said yesterday.
Mexican Output
Petroleos Mexicanos, Mexico's state oil company, produces about 1.07 million barrels of oil a day in the Bay of Campeche, which is south of the projected track of the storm. Dolly isn't expected to reach company platforms after it enters the Gulf, Petroleos Mexicanos spokesman Javier Delgado Pena said in a telephone interview yesterday.
U.S. crude oil and fuel production plunged and prices rose to records when hurricanes Katrina and Rita shut refineries and platforms as they struck the Gulf of Mexico coast in August and September 2005. Katrina shut 95 percent of offshore output in the region. Almost 19 percent of U.S. refining capacity was idled because of damage and blackouts caused by the hurricanes.
The North Atlantic hurricane season runs from June through November. September is historically the busiest month for storms and hurricanes.
U.S. oil inventories have fallen in seven of the past nine weekly government supply reports. Stockpiles rose 2.95 million barrels in the week ended July 11, the Energy Department said last week.
To contact the reporter on this story: Christian Schmollinger in Singapore at christian.s[at]bloomberg.net.
Last Updated: July 22, 2008 00:15 EDT

up and down.

Wonder how Iran is going to counteract this news? They need to get it back up.

Originally Posted by bkkandrew

Predictably, another red from the failing, flailing, squirming Butterfly.

yeah a well deserved red for failing to explain yourself and trolling,

anyway back to the topic,

Now, more and more oil experts agree that oil is going for a major correction, which support the idea that current oil price were pushed on "imaginary" demand, and pure speculation,

would be interesting to see how the price is falling at the pump, there is a 60c Euro drop expected for the year in the Euro zone,

^Yeah, its difficult for you to understand. Higher demand (shown by my figures), stagnating, lower supply (shown by my figures), resulting in a higher price over the period (since 2005).

But Butterfly will argue over and over that this is not the case, without actually disputing any of the facts.

Originally Posted by bkkandrew

^Yeah, its difficult for you to understand. Higher demand (shown by my figures), stagnating, lower supply (shown by my figures), resulting in a higher price over the period (since 2005).

yeah, yeah, yeah

keep dancing troll, growth rate is nowhere on those graphs, only quantities, nice try though

^The EIA disagree with you (but then again so does everyone else):



Source:

EIA - Short-Term Energy Outlook

Oh yes - you described them as 'loonies' earlier in the thread!

On the supply side:



Source:

EIA - Short-Term Energy Outlook

The 'loonies' again, but note the reliance on OPEC increases in 08.

But OPEC's capacity has been at historic lows, so is it just wishful thinking?



Source:

EIA - Short-Term Energy Outlook

Yet interestingly, when this data is drilled down, you find this:

OPEC Supply. OPEC crude production in the second quarter of 2008 averaged an estimated 32.3 million bbl/d, up only slightly from 32.2 million bbl/d in the first quarter. Higher production in Iraq and Angola more than offset lower production in Nigeria caused by security problems and worker strikes. Assuming that Saudi Arabia’s announcement of raising July output to 9.7 million bbl/d results in a higher sustained rate of production through at least September, OPEC crude production is projected to average 32.7 million bbl/d during the third quarter. At these production levels, available surplus production capacity during the third quarter would be only 1.2 million bbl/d, marking the third consecutive quarter that surplus capacity stood at or below 1.5 million bbl/d. All of this capacity is held by Saudi Arabia (OPEC Surplus Oil Production Capacity). Any industry operating at close to 99 percent of capacity will remain vulnerable to surprises that either boost consumption or disrupt production. Such surprises would place additional upward pressure on prices and contribute to oil price volatility. In this tight global oil market, OPEC countries have also faced delays in adding new production capacity, notably in Algeria and in Saudi Arabia, whose 500,000 bbl/d Khursaniyah project has been pushed back to the end of 2008.

My bold highlighting added. So its tight at best, wishful thinking at worst.