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Head's Up: Short Term Crude Oil Price Going Up


Wolfbane

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I love it.  it was so bad for the market when oil went low.  Now it's so bad that oil is climbing.  Just as I posted back then.  Wall street is perverse.  It used to be just the bond market was perverse, now it's everyone.  it went low because of the production glut.  Now oh my or maybe your god the price is rising on short term fears.  Here's the thing:  You need gas when you need it.  You need those other things when you need them.  if you pay a few bucks more later than now?  if that breaks you then you have bigger fish to fry.

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I love it.  it was so bad for the market when oil went low.  Now it's so bad that oil is climbing.  Just as I posted back then.  Wall street is perverse.  It used to be just the bond market was perverse, now it's everyone.  it went low because of the production glut.  Now oh my or maybe your god the price is rising on short term fears.  Here's the thing:  You need gas when you need it.  You need those other things when you need them.  if you pay a few bucks more later than now?  if that breaks you then you have bigger fish to fry.

 

???

 

Wall street has very little to say about crude oil pricing. However, Saudi Arabia does. The price of crude is driven by the currently available supply versus current demand. The current daily demand for crude oil is 92 million bbl/day world wide. The current world-wide available supply is 93.5 million bbl/day. By my math, 1 million bbls a day out of the market leaves the current daily over supply as 500,000 bbls. This is a margin of 1/2 of one percent.

 

That said, the replacement for this shut-in oil has to be made up from either Mexican Maya Heavy Crude or heavy crude from Venezula coming into North America via Texas.

 

One million bbls/day in North America with a daily demand of ~20 mbpd is 5%.

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I love it.  it was so bad for the market when oil went low.  Now it's so bad that oil is climbing.  Just as I posted back then.  Wall street is perverse.  It used to be just the bond market was perverse, now it's everyone.  it went low because of the production glut.  Now oh my or maybe your god the price is rising on short term fears.  Here's the thing:  You need gas when you need it.  You need those other things when you need them.  if you pay a few bucks more later than now?  if that breaks you then you have bigger fish to fry.

 

???

 

<snip>

= Bigger picture than knee jerk reaction. 

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Expect it to creep up, or even jump.  The oil producing countries (not counting us) have accomplished their aim of destroying much of our drilling capacity.  Now it's time for profit taking.  It will take years to restore what they ruined.

 

Dave

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One million bbls/day in North America with a daily demand of ~20 mbpd is 5%.

 

Enough to feed a large refinery for 1 1/2 or 2 days.

 

 

Yes, enough to supply the largest refinery in the US (Port Arthur, TX) for a couple days if it is running at capacity.

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I bought gas at a Chevron yesterday @ $2.16 . Today on the ride by there I noticed gas (regular-same place) was $2.26. A few hours later today I bought at a different Chevron a few miles away @ $2.13 . Florida gulf coast. I don't what's going on down here. But the flounder is good.

 

 

Keith

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