tyaresun writes:
Not attacking Iran after all?
tyaresun | 05.16.08 - 1:47 pm | #

gab writes:
Headline I just read that Saudi Arabia plans to increase oil production by 300,000 bpd.
gab | 05.16.08 - 1:48 pm | #

Anonymous writes:
BFD
Anonymous | 05.16.08 - 1:49 pm | #

Malaclypse writes:
Thank god the mortgage crisis did not teach us to live within our means and/or save for a rainy day.
Malaclypse | 05.16.08 - 1:51 pm | #

SeattleSun writes:
Headline I just read that Saudi Arabia plans to increase oil production by 300,000 bpd.


The way I heard it was the increased production by Saudi was to offset reduced production by another(s) OPEC producers with total production staying flat.

Oil moved down on the news. Some beleive Saudi actually has not more capacity. This would demonstrate otherwise.

SS
SeattleSun | 05.16.08 - 1:52 pm | #

Mike in AZ writes:
Time to start selling it off. Remember: buy low sell high!!
Mike in AZ | 05.16.08 - 1:52 pm | #

Anonymous writes:
gee....after filling it up at prices well north of reality finally stopping at complete absurdity?? nice going away present for the Arabs fro Bush 'ain't it.

As far as Iran...that is still going to happen just may be after McBush is installed....

Ciao
MS
Anonymous | 05.16.08 - 1:53 pm | #

Oil Equations writes:
CLF split today...

iron pellets..

think steel pipe. drill pipe. think holes everywhere.
imagine deep ocean drilling, 10k ft water, and 20k ft under seabed.
Oil Equations | 05.16.08 - 1:57 pm | #

iceman writes:
I don't know about this making a different - 0.1% is really small.
iceman | 05.16.08 - 1:58 pm | #

Bob Dobbs writes:
Didn't this come down earlier in the week? I heard it'd bring down the price of gas by maybe a nickel.
Bob Dobbs | Homepage | 05.16.08 - 2:00 pm | #

Kp writes:
GS said oil is going to 200, I'd read that as "we are going to squeeze the shorts to make it happen"

Risky business....oil, stocks, bonds the whole lot of it.

Seems more sensible to trade your dollars for practical, tangible stuff instead of pieces of paper.

This market is being controlled by people who are not personally invested in the outcomes themselves, but instead by the volatility. They have no interest in the direction or consequences of the movements...only in that those movements occur.
Kp | 05.16.08 - 2:00 pm | #

El Cliffo writes:
Gasoline got so expensive even the Government can't afford it.
El Cliffo | 05.16.08 - 2:07 pm | #

Anonymous writes:
iceman-

we have 'problems' in places that have less of an affect on the supply than that and it goes up $3-4 on those "issues".

It's the wild,wild,west at the NYMEX....someone needs to go postal on 'em.

Ciao
MS
Anonymous | 05.16.08 - 2:08 pm | #

Angry Saver writes:
Bernanke can crush runnaway oil and commodity prices tomorrow by raising interest rates. A steady CPI would do wonders for consumer confidence too.

Foolish lenders and borrowers would have to take their medicine though.
Angry Saver | 05.16.08 - 2:11 pm | #

Angry Saver writes:
The fed and the financial system are now slaves to high asset prices. Welcome to Japan with inflation.

Too much debt, too little output.
Angry Saver | 05.16.08 - 2:13 pm | #

byzantine_ruins writes:
Oil moved down on the news. Some beleive Saudi actually has not more capacity. This would demonstrate otherwise.

It's an announcement by the Saudis. The people whose king ruled for years after he was brain dead? The people who mark their reserves up every year by the amount they pumped? The people who have shipped 6%+ less oil per year for the last 2 years while denying it? But *this*, this press release is true?

Why in the world would you evaluate anything they said as anything other than a tactical positioning?
byzantine_ruins | Homepage | 05.16.08 - 2:15 pm | #

GaudiaRay writes:
The big picture, continues to be, imo:

Drive the value of US external debt, and the now ugly RE-related, and soon, across-the-board debt, down in terms of the real store of value, commodity purchase capacity (my phrase, "world buying power").

What's happening should continue to happen well above $200 oil. It will effectively cut the "tax" of debt service by 50 to 75%.

Yes, the savers get screwed. This is nothing new. Remember the Continental? What was it worth? Remember Weimar?

What's transpiring now is a managed attempt to stop the devaluation at a number above zero.

If you have a thought on how governments will stop the devaluation prior to reaching zero, please post. Probably, as Volker said, if confidence remains, in spite of the termination of claim-value by the fiat and debt instruments, the severe devaluation will shift production back to the US and Europe, and the market will stabilize on its own.

Believe it or not, I'm involved as a mfr in making that happen; the materials prices are universal...they're measured in world commodities prices; it's the labor disparity that diminishes every time the price of energy rises. This is as obvious as day and night. The economic opportunities arise from this ongoing event.
GaudiaRay | 05.16.08 - 2:16 pm | #

4shzl writes:
Saudi Arabia’s leaders made clear Friday they see no reason to increase oil production until customers demand it, apparently rebuffing President Bush amid soaring U.S. gasoline prices.

OK, Dubya, now pick the carpet lint of the knees of of trousers and skeedaddle.

http://www.msnbc.msn.com/id/ 2466...#storyContinued
4shzl | 05.16.08 - 2:18 pm | #

Jas Jain writes:
--
I think that we have enough reserves to attack Iran. That was the strategic part of SPR.

McCain's victory would necessitate attack on Iran.

Jas
Jas Jain | 05.16.08 - 2:22 pm | #

mike q writes:
speculationcity...as dan dicker at the street pointed out -> "As speculation enters the energy market, it is overwhelmingly coming into crude oil and not into refined products -- summertime cracks for gasoline, normally somewhere between $20 and $40 the last few years, have now recently recovered to $9 after being briefly negative for a moment less than two months ago. That's right; there was a moment where the price of a gallon of refined gas was actually selling for LESS than the crude oil that went into it." -

REPEAT "the price of a gallon of refined gas was actually selling for LESS than the crude oil that went into it"
mike q | 05.16.08 - 2:27 pm | #

Joe Klein's conscience writes:
Paulson says ponies for everyone, right around the corner.
Joe Klein's conscience | Homepage | 05.16.08 - 2:34 pm | #

wally writes:
The Saudi announcement and the Strategic Reserve annoucements are, of course, coordinated. They could make a difference. Remember that there is approximately the same demand today for the same quantity of oil as a year ago - at a different price. The supply and demand curves are nearly vertical - so there is huge price leverage exerted by small events, even those that are mostly psychological. (As these two are).
wally | 05.16.08 - 2:34 pm | #

BB writes:
What are the chances of the FED actually raising rates this year?

Seems they are setting it up with all the talk that the worse is over.
BB | 05.16.08 - 2:37 pm | #

Anonymous writes:
"What are the chances of the FED actually raising rates this year?"

Lower before, higher the misery is not yet complete.
Anonymous | 05.16.08 - 2:41 pm | #

Milkman writes:
Bush Rebuffed Again by Saudis

http://www.nytimes.com/2008/05/1...&hp& oref=slogin

Bush asked last January and the Saudis said 'no.' They won't increase production enough to lower costs at the pump.
Milkman | 05.16.08 - 2:41 pm | #

AK writes:
That will save the world

Your blog is really nice. It Has some good content and is very interesting.

Check this free word Dictionary where you can own a word and guess what the first 9999 are free. You do not have to pay anything for the 9999 words. Also you can have a permanent link to your website


Own a word and be a part of history. http://www.india-dictionary.com

Dhanlaxmi
AK | Homepage | 05.16.08 - 2:41 pm | #

Cobradriver writes:
think steel pipe. drill pipe. think holes everywhere.
imagine deep ocean drilling, 10k ft water, and 20k ft under seabed.
Oil Equations | 05.16.08 - 1:57 pm | #

I am really hoping we get a half dozen Thunder Horse type projects going in the GOM. I know my brother is buried in work out there now...

Chris
Cobradriver | 05.16.08 - 2:42 pm | #

Angry Saver writes:
Cobradriver,

I flew over the GOM about a month ago. I was surprised at how few rigs I saw.
Angry Saver | 05.16.08 - 2:47 pm | #

Angry Saver writes:
Jas,

Was the Japanese bust good or bad for people with no debt?

In the land of the blind, the one eyed man is king.
Angry Saver | 05.16.08 - 2:48 pm | #

gab writes:
Bloomberg says,"... SA will increase crude production next month in response to reising demand from its customers and a request by US President George Bush..."

"The country will raise output by 300,000 bpd to 9.45 million..."

Oil still up $2.25 on the day.
gab | 05.16.08 - 2:49 pm | #

cd writes:
OT-
Volcker congress hearing on 5/14
Bloomberg started broadcast and interrupted with Betty Liu on stock news. Never came back to him..no mention anywhere..

http://www.youtube.com/watch?v=T...h? v=TBpKEdDQaaU
cd | 05.16.08 - 2:54 pm | #

DownSouth writes:
This is priceless:

http://www.chron.com/disp/story....ss/ 5784848.html

The juxtaposition of the foto of Bush receiving a kiss from Simon Peres and the headline "Saudis tell Bush they see no reason to hike output" is worth a thousand words.

Bush had to chose between the neocons and the guys with the oil wells. He chose the neocons, and today the American people are pay the price every time they pull up to the pump.
DownSouth | 05.16.08 - 3:11 pm | #

tai writes:
Bernanke can crush runnaway oil and commodity prices tomorrow by raising interest rates.
====================================
Someone with superior knowledge than me, please answer the following. If the Chinese with their 1.6T in reserves (or other large SWF) wanted to corner the market, could the Fed stop them without creating a severe economic retraction? Sounds like someone doing to the US what Reagan supposedly did to the Soviet Union.
tai | 05.16.08 - 3:11 pm | #

Cobradriver writes:
"I flew over the GOM about a month ago. I was surprised at how few rigs I saw."
Angry Saver | 05.16.08 - 2:47 pm | #

My brother pulled out the map of the areas he flies to in the GOM. Holy shit there are a lot of rigs !!! I think they are so small they are hard to see from anything less than a helicopter. You have a lot of undersea wells that pump to a main rig. So even though there might be 20+ wells you only see 1 main rig...

Chris
Cobradriver | 05.16.08 - 3:12 pm | #

Kp writes:
Some of the smaller platforms I have toured can support up to as many as 32 wells.

Remember, they can steer those wells in any direction....so when they find a field of oil they sink a bunch of straws into in a dispersed pattern.

All in all....I don't think the rig count is nearly as high as it was pre-80s meltdown.
Kp | 05.16.08 - 3:28 pm | #

Anonymous writes:
"OK, Dubya, now pick the carpet lint of the knees of of trousers and skeedaddle."

Bush is from Texas and high oil prices are good for Texas so I don't think that is exactly what went on. Wink* Wink*
Anonymous | 05.16.08 - 3:36 pm | #

Kp writes:
Baker Hughes puts average US Rig Count at:

1981 - 3974
1986 - 964
1995 - 723
2000 - 918
2001 - 1156
2002 - 830
2003 - 1032
2004 - 1192
2005 - 1383
2006 - 1649
2007 - 1768
2008 - 1793
Kp | 05.16.08 - 3:39 pm | #

Sebastian writes:
BB asked: "What are the chances of the FED actually raising rates this year?"

Since 1992 there have been 4 pretty clearly-delineated cycles of Fed easing/tightening. (It gets a little "choppy" before that, making the cycles a little harder to distinguish.)

Since 1992, between the end of the previous easing and the beginning of the new tightening, the time-lag was 15 months, 13 months, 7 months and 1 year.

By that indication alone it seems unlikely that there will be a Fed easing this year. Add-in the Fed's current fear level and the chance that they could still ease once more "just to make sure", I'd say there's zero chance of the Fed tightening at any time in 2008.


Sebastian
Sebastian | 05.16.08 - 3:39 pm | #

Sebastian writes:
"By that indication alone it seems unlikely that there will be a Fed easing this year."

Sorry, unlikely to be a Fed *tightening* this year.


S.
Sebastian | 05.16.08 - 3:42 pm | #

ridingycurve writes:
Well the country is saved. Hallelujah!

CL closed at $126.53, only up $2.41, and XLE and OIH are both threatening to take out their ATH's.

At least I’m partially hedged against the fumbling, bumbling morons in D.C., who don't know a wit about energy markets or sound energy policy (Roscoe Bartlett and a couple of others excluded).

By the time the pols on both sides of the isle are done meddling in the markets, I'm confident that price will be at least $10 bbl higher than it otherwise would have been.

What really scares me is the magic they'll attempt to work on the mortgage and housing markets. How much is that going to cost me and how do I hedge it?
ridingycurve | 05.16.08 - 3:43 pm | #

Sebastian writes:
ridingycurve asked: "...What really scares me is the magic they'll attempt to work on the mortgage and housing markets. How much is that going to cost me and how do I hedge it?"

Buy a house?

I've always thought there was less to the housing "crisis" than there appeared to be, but if there really is a movement on to "save" homeowners wouldn't it be logical to own what's going to get bailed-out?


Sebastian
Sebastian | 05.16.08 - 3:54 pm | #

Anonymous writes:
Seb-

Do you even look at charts????

I didn't think so....

Ciao
MS
Anonymous | 05.16.08 - 4:08 pm | #

ugh writes:
Huh.

A dollar short and a day late. Typical gubbermint.
ugh | 05.16.08 - 4:37 pm | #

WildBill writes:
"Sebastian writes:
ridingycurve asked: "...What really scares me is the magic they'll attempt to work on the mortgage and housing markets. How much is that going to cost me and how do I hedge it?"

Buy a house?

I've always thought there was less to the housing "crisis" than there appeared to be, but if there really is a movement on to "save" homeowners wouldn't it be logical to own what's going to get bailed-out?"

******************

Ok, Seb, I've always enjoyed you since I appreciate a stalwart contrarian. But I think you may be crossing over into stand-up territory with this one. At least, it made *me* laugh out loud...
WildBill | 05.16.08 - 4:44 pm | #

Keep It Simple, I'm Stupid writes:
Can anyone explain how the BLS calculates the increase in the price of gasoline? The latest CPI number was based upon a 2.0% decline in the price of gas. They got this by seasonally adjusting a raw increase of 5.6%.

First, I'd like to see a justification for a 7.6% seasonal adjustment. My bigger problem, though, I that I seemed to remember the price of gas going up more than that. Sure enough, when I went to the Energy Information Administration's web site, they showed the average price of a gallon of gas on 3/31 as $3.290. The average price in 4/28 was $3.603. Running that through my calculator, I come up with a 9.5% increase, not 5.6%. What's up?

At least I finally had a job interview today. It's for about half what I made at my last job, but it's the first interview I've landed in two months.
Keep It Simple, I'm Stupid | Homepage | 05.16.08 - 4:46 pm | #

Sebastian writes:
WildBill said: "Ok, Seb, I've always enjoyed you since I appreciate a stalwart contrarian. But I think you may be crossing over into stand-up territory with this one. At least, it made *me* laugh out loud..."

No, no, don't worry about it, no offense taken.:)

I was only half-joking about buying a house. Clearly a buyer's market, exceptionally pessimistic sentiment, 30-year fixed mortgage rates still very low. Anyone who would like to own a home and agrees with Warren Buffett's concept of buying sound assets when nobody wants them and keeping them for a long time has *ought* to be thinking about buying this year.

In all seriousness, once interest rates start rising again next year the payments that prospective homeowners would have to pay will start going up, and people will respond to that. They'll want to get in while the payments are still low, that will be the catalyst, along with a strengthening economy.



Sebastian
Sebastian | 05.16.08 - 5:12 pm | #

Daniel Nicolas writes:
Even if things don't recover for 20 years, you could turn your house into a profitable venture by converting your first floor into a weed growing operation.
Daniel Nicolas | Homepage | 05.16.08 - 5:24 pm | #

Aheadofthecurve writes:
Sebastian-You should know better. Don't you know that the only thing you should EVER buy is gold, which you should bury in the back yard. I read that on a blog so it must be true.

Oh, wait a minute-you need a house in order to have a back yard to bury the gold in... What do I do now?
Aheadofthecurve | 05.16.08 - 5:24 pm | #

Heliben writes:
Sebastian,
I agree with Buffet's concept. the problem is that we are still a long way from "nobody wants them". Personally, I'm waiting on your capitulation to jump in. We'll know that moment has arrived when you no longer post.
Heliben | 05.16.08 - 5:25 pm | #

dryfly writes:
Believe it or not, I'm involved as a mfr in making that happen; the materials prices are universal...they're measured in world commodities prices; it's the labor disparity that diminishes every time the price of energy rises. This is as obvious as day and night. The economic opportunities arise from this ongoing event.
GaudiaRay | 05.16.08 - 2:16 pm | #

Agreed.

But that isn't terrible - people don't eat paper or gold or savings or stocks - they eat what gets grown every year and some how the world has to keep growing enough food in spite of the increasing numbers of paper pushers & speculators & shorts and all others who don't grow anything, they just eat.

People think this current mess is hell - they don't know anything. If there are roofs over heads and food on tables - then the rest is just appearances & ego fulfillment... Veblen fodder.

dryfly | 05.16.08 - 5:36 pm | #

Keep It Simple, I'm Stupid writes:
People think this current mess is hell - they don't know anything. If there are roofs over heads and food on tables - then the rest is just appearances & ego fulfillment... Veblen fodder.


Naps. My cats insist that naps are also important.
Keep It Simple, I'm Stupid | Homepage | 05.16.08 - 5:50 pm | #

jackk writes:
guess everybody was wrong about a pm bank failure(s) announcment
jackk | 05.16.08 - 5:55 pm | #

Harsh Realty writes:
Gasoline got so expensive even the Government can't afford it.

Actually it's true. There was a CNN video a few days ago about police officers riding double in their cruisers.

We are going to return to the Miami Vice days... except instead of cops in rubber dingies chasing cigarette boats it's going to be cops on bicycles chasing Skyline GT-R's.
Harsh Realty | 05.16.08 - 5:58 pm | #

bond guy writes:
"Can anyone explain how the BLS calculates the increase in the price of gasoline? The latest CPI number was based upon a 2.0% decline in the price of gas. They got this by seasonally adjusting a raw increase of 5.6%."

Look, just look at the freaking non-seasonally adjusted numbers. That's the only official CPI index that is used for COLA's TIPS, etc.

Economists seasonally adjust the numbers so they can see underlying trends. I seasonally adjust the CPI myself so that I can price inflation-linked securities. So yes, if the price rises by less than the seasonal pattern, the price rise is turned into a m-o-m decline.

But if all you want is to know the y-o-y rate of CPI, use the non-seasonally adjusted numbers.

Keep in mind that they have to revise _up_ the gasoline monthly during other months (late fall, I believe) in order to keep the seasonal adjustments neutral over the year.
bond guy | 05.16.08 - 6:26 pm | #

rc writes:
IMO as soon as Helicopter is sure McCain will win he will start threatening, with action soon to follow, to increase the FFR. This alone will bring down the price of oil and stop the speculation. He's just waiting to make sure Hillary isn't in the picture.

Higher interest rates are coming and housing will take another beating.
rc | 05.16.08 - 7:56 pm | #

mysterious eggs writes:

Bush is from Texas and high oil prices are good for Texas so I don't think that is exactly what went on. Wink* Wink*
Anonymous | 05.16.08 - 3:36 pm | #


Except that the two major cities in Texas require you drive 45 minutes to get anywhere and waste loads of energy cooling your house for 6 summer months. It's not as simple as, "high oil prices are good for Texas". It may be lucrative for a few people who own or trade the commodity but outside that circle of people it isn't so simple.

Since the US is embracing some of the less desirable properties of socialism, like stiffing workers with inflation and bailouts, why can't we adopt some of the better ideas like urban planning? We could improve the gridlocked, urban sprawl that we confuse for cities these days.
mysterious eggs | Homepage | 05.16.08 - 8:34 pm | #

DiverTj writes:
Lemmings, just watch the EIA report. It comes out on Wed at 10;30 each and every week to see our supply issues. Yahoo EIA and weekly petroleum (sp) report
DiverTj | 05.16.08 - 8:55 pm | #

eckalectic writes:
re:"What are the chances of the FED actually raising rates this year?"

Two chances: Slim and Fat.
eckalectic | 05.17.08 - 3:39 am | #

dan writes:
KISS

The BLS is measuring the y-o-y change in the velocity of price increases - compared to the previous year the price change ( as a % ) from March to April was lower this year. It's quite likely that for May the same factor will come into play, and the seasonal adjustment will lead to a small decrease.

For June and July and beyond, they will change their methodology as the price change will show an inflation rate for gasoline of 8% or more per month.

What the BLS does not account for is the fact that in 2007 the US gasoline production/supply industry was working on a business model that was called "let's make a profit". Currently the business model is called "we''re going to sell every gallon at between break-even and a loss".
dan | 05.17.08 - 5:34 am | #

Spiv writes:
Wow, 701 million barrels of crude in the strategic reserves, that's enough oil for...

35 days.
Spiv | Homepage | 05.18.08 - 4:53 pm | #

UnLucky writes:
Mike Q, I think is was March 17 when the crack spread was zero. Why refine oil at that price?
UnLucky | 05.18.08 - 11:56 pm | #