Phil Flynn Kommentar von heute (Strategic Petroleum Reserve, Exxon Mobil)

verfasst von off-shore-trader, 18.10.2004, 21:42

-->October 18, 2004

Alan Green-spin spins oil and gave the energy markets a green light to go higher! The Fed Chairman said,"The impact of the current surge in oil prices, though noticeable, is likely to prove less consequential to economic growth and inflation than in the 1970".

In other words, Mr. Greenspan is saying it's time to buy oil! Demand is not going to be squashed at these price levels. It may be slowed but as Greenspan says,"The risks of more serious negative would intensify if oil prices were to move materially higher". What's materially higher? We don't know but probably not a lot higher. He pointed to the 2010 crude oil futures contract which did not rise as much as the November, 2004 contract did. His point is the impact of geopolitical events as well as the short term impact of hurricane Ivan is a big part of why prices are higher due to tight supplies.

The movement of the 2010 futures contracts also leaves Mr. Greenspan to assume high oil prices will eventually cure high oil prices. As we've seen many times in the past, high prices will lead to alternatives and brings on new supply. And despite expectations for rising demand over the next decade, the power of the free markets will eventually solve the issue of supply tightness. The Fed Chairman made it abundantly he rejects the notion the supply of oil has peaked and dismissed any chance the world will soon run out oil. He is confident the free market will find the answer.

That's why I have stressed and continue to do so that unless there is a serious disruption, a release from the Strategic Petroleum Reserve is a mistake. Trying to use the SPR as a short term price manipulation, even though we are at war, is a bad idea. Releasing this oil would discourage the type of activity and market forces Mr. Greenspan believes will eventually fix the problem of too strong demand and too little product. Even if we did use some of the SPR, where would we stop? Once we head in that direction, even one mistake could do long term damage to the market and the US. And who would be the decision maker? Should we appoint a director of the Federal Reserve of Oil? Does this Oil Chairman release oil when prices are high and buys oil when the price is low? We better step up our reserve amount tremendously because all the oil in the world, including OPEC, wouldn't keep prices from spinning out of control. Consider as well we have a very small amount of oil in reserve. Remember too there were many in Congress that wanted oil released when it was trading at $35.00 per barrel and that seems cheap now! We had no where near what we would need to try to keep the price at those levels.

One other thought about the SPR. It has acted as great detriment to OPEC from keeping supply too tight. Fear of the US using that oil has had OPEC keeping production high so the world is well supplied and not needing to release reserve oil. The SPR needs to stay where it is and used only in a dire emergency due to supply disruption. Never just to satisfy vote seeking politicians.

Alaska is investing wisely and in the gas business. The WSJ reports today,"Alaska is hammering out a deal that could require the state to invest billions in a $20.0 billion pipeline to carry natural gas from Alaska's remote North Slope to the US market". Instead of collecting just royalties and taxes, they'll have a real stake in ownership and that means more risk but more profit potential as well. Citizens of Alaska already receive checks from the state from oil. And the way natural gas is going they could clean up!

The WSJ is also reporting,"Exxon Mobil Corp said it would take a third quarter charge of $550 billion dollars, after the Supreme Court last week let stand a ruling that the oil company deprived thousands of gasoline station dealers money it owed them under a program to encourage discounts for cash paying customers".

It's a bull and no correction in sight! The higher he goes the harder he's going to fall. When? No end in sight yet! If you have huge profits on longs, protect yourself with stops and/or puts. If you're not long and want to be then time to open your account with me. Call me at 800-935-6487 and ask for Phil Flynn! We're buying breaks.

OPEC says they're pumping the most oil they have since the 1970's! They've raised their pumping estimate by 200,000 barrels to a grand total of 81.8 million barrels per day.
(correction:Opec production 30.12mpd World demand estimate is up to 81.8mb)

Iraq is pumping 2.2 million barrels per day!

Stopped on long dec crude from apprx 5130 at apprx 5346!!! Buy dec crude at 5275 - stop 5234.

We're long dec heating oil from apprx 15300 - raise stop to 15150.

Buy dec unleaded at 13800 - stop 13690.

Buy dec natural gas at 773 - stop 765.

Have a GREAT day!

<ul> ~ Phil</ul>

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gesamter Thread:

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    • Re: Short im Ã-l-Future - Per_Jakobsson, 18.10.2004, 21:13
      • Phil Flynn Kommentar von heute (Strategic Petroleum Reserve, Exxon Mobil) - off-shore-trader, 18.10.2004, 21:42
      • Re: Short im Ã-l-Future - KEEP-COOL, 18.10.2004, 22:16
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