"CRUDE" oil, an absolute must see program !!!

[the1much]

you guys type too dam much!!,,hehe,,,my eyes cant read in the mornin,,,,or is it my head,,,hmmm,,hehe
over half the cars sold here now are 4 cylinders hehe

[Meanz Beanz]

Yeah .... blah blah blah..

Rather than the x? posts I deleted read this...

http://en.wikipedia.org/wiki/Futures...act#Settlement

and think about it...

These are the rules of this little game...

You take the short side of a contract (obligation to deliver) or the long side of a contract (obligation to take delivery). All trades must be resolved by the delivery date. If you don't intend to deliver or take delivery then --> you must close out your contract postion before delivery is required. All you need to create an extra contract (increase open interest) is an agreement between two parties at a price i.e endless new contracts can be created to satisfy any idiot speculator that wants to pay over the odds. All that is required to close a contracts (decrease open interest) is for two parties to leave the market i.e sell thier obligations, long or short. The futures market can expand and contract without having a direct effect on the physical market... supply is very fluid.

*Note:What I'm trying to do is get across the mechanics of creating, closing and reconciling contracts physically at the end of the period. This is how the futures market ties back to real supply and demand. Those contracts still open (total open interest) at expiry will be expected to be acted upon.

Buyers Action ->Sellers Action ->Change in Open Interest

1. Buys new long -> Sells new short -> Increases
2. Buys new long -> Sells old long -> No change
3. Buys old short -> Sells new short -> No change
4. Buys old short -> Sells old long -> Decreases

Now create an imaginary market... of say 1000 people that want to trade, populate as you wish with people that need to sell, need to buy and those that just sell and buy but can neither take delivery or deliver (investor, speculators... what eva). Work it through in your head, ask yourself what happens if you have 700 speculators that drive the price high and then don't take delivery. What happens when they become sellers, as they must, to cover before delivery. You should come to realise that without underlying demand prepared to pay the price asked at delivery the price would collapse i.e. if physical demand does not support the price set by the market at the point of delivery price will collapse to a level supported by the physical market. Its the day of reckoning, the put up or shut up, the bluffs called and the black stuff shipped. Middle men, punters, speculators, investors etc.... what...eva! The market couldn't give a f__k, put up or shut up, money down or fold and walk.... its real or its not a deal.

Speculate, invest, trade... you are either wrong, right or flat in respect to the fundamental demand at the end of the month but whatever you are it will not kill demand or create extra barrels and thats what sets the price on delivery... get it wrong and you lose!.. get it right and you win

Beyond that I can't help you... stick pins in voodoo dolls if you wish but I recommend you buy a smaller car and cut consumption wherever you can... its a price signal, listen to it, its not joking in the slightest and its the only thing in this market thats not full of ****... unlike Congress, the Saudis and those gooses suing Libya.

[Meanz Beanz]

Morning Jimbo!

[the1much]

MORNIN BEANZY,,im being over taken by dumb people with alternators,,hehe

[brian eiland]

Originally Posted by brian eiland

Rep. Edward Markey (D-MA) chairs a Select Cmte. on Energy Independence hearing to discuss the future role of the auto industry and the federal gov't in fighting gas prices and to examine the fuel economy standards proposed in response to the enactment of the Energy Independence and Security Act (EISA) of 2007.

Here is a CSPAN link. I'm sure an abbreviated version will appear on YouTube and I will edit this posting accordingly when it comes online.
http://www.c-span.org/
...then click on "House Select Cmte. on Energy Independence Hearing on Gas Prices & Fuel Economy", June 26, 2008

That 'YouTube' link has not yet appeared. And I know that this CSPAN version is too long for most folks to wade thru. So I marked down a few 'time frame windows' that characterize some of the hi-lites of this hearing.

I'll start at the summary statement by Ed Markey that challenges us in the USA to look back at the history of one of our nation's GREATEST technological accomplishments, putting a man on the moon. In 8 years we accomplished this feat....AMAZING !!!! (Particularly when you consider how long we've been working on other problems far less complicated)
Listen to the video segment from time 52:00 minutes to 1:07:00. Ed Markey is suggesting our way out of the fuel oil dilemma is to challenge OPEC with new technologies that we are fully capable of developing.

Listen to the video segment from time of 1:13 to 1:17. John Kennedy challenged our nation to put a man on the moon. Ed Markey invokes this spirit of Kennedy's, to challenge America once again to rise to the occasion of a race for new energy technologies. The prospect of this new future alone could lower futures prices for oil.

If these two segments get you interested in what was said at the hearing, here are two more surprises ....can you really believe that some young fellow (Bush appointee) would come to this meeting and suggest that they are modeling their energy policy based on a forecast of $2.42 per gallon of gas in 2015 What kind of kool-aid are these guys passing around down there in Washington DC No wonder we are in trouble.
Watch these two segments:
13:00 to 15:30
33:30 to 35:50

[Meanz Beanz]

Originally Posted by brian eiland

Ed Markey is suggesting our way out of the fuel oil dilemma is to challenge OPEC with new technologies that we are fully capable of developing.

Yes, this is absolutely required. I have seen some fascinating stuff, air cars, oil from bacteria, geothermal plants, wave plants etc things that save and things that create energy.

Two of the more challenging ideas are a steam hammer and an electric generator, both of which I have seen running on videos. The reason they are challenging is that they both claim over unity, something that is held as impossible by the scientific community. Over unity simply means they can generate more power than they consume, it sounds to good to be true and probably is. However these things exist and are very elaborate looking bits of kit for a hoax. They need investigating, could it be that the next quantum leap will come from an idea long held to be impossible. It would not be the first time scientists have closed their minds on the basis of a "thought to be known" principle. Don't flame me on that guy's, I have not got a clue as to why it should or shouldn't be possible and I am not going to argue it. Aside from the "too good to be true" principle and at the risk of looking foolish I keep an open mind on this stuff. At the very least the steam hammer is a very efficient way to heat water, very cheaply. Its installed and working in a US fire station now, they are very pleased with it as a water & heating device.

Anyway, let the market run, let the high price of energy give wings to all those inventors & creators, crackpots or otherwise to solve this problem. The government can't mandate the genius required here yet we have those among us that can get us across the line, we just gotta give them some encouragement

http://au.youtube.com/watch?v=huLhq190A_Y

http://au.youtube.com/watch?v=yh_-DUKQ4Uw

http://www.lutec.com.au/how.htm

**Note: Lutec are going to be selling their machine by the end of 2008!

Bugger... just read on the front of the website... "Product release date postponed indefinitely due to possible Transfer of Technology negotiations" .... bought out and shut down?? Please say it ain't so!

The other guy doing it...

http://au.youtube.com/watch?v=efCelx7qe_M

Originally Posted by brian eiland

If these two segments get you interested in what was said at the hearing, here are two more surprises ....can you really believe that some young fellow (Bush appointee) would come to this meeting and suggest that they are modeling their energy policy based on a forecast of $2.42 per gallon of gas in 2015 What kind of kool-aid are these guys passing around down there in Washington DC No wonder we are in trouble.

Yes well.... central planning does not work for us, as a species we have proved that... yet we keep demanding more of our clueless reactive governments, that would make us a bit stooopid as well... no? A favourite quote... "If they didn't see the problem coming what makes you think they can get us out of it."


For anyone that can be bothered a short course on futures...

[masalai]

WoW,,,,,,, that was a lot to absorb, - - Thanks Heinz, - "Cool Hand Luke" in action, and thorough analysis if read carefully and with thoughtfulness.... (Sorry DB a little 'masalai dig' - keep smiling ).....

I feel a little more relaxed (mum is in "care" for 2 weeks "respite break").... Heinz, If you are coming up to "Bananabender Land" give me a call & I will shout you lunch - IOU....

[the1much]

mornin Mas., Beanzy,,all else joinin,,6:32pm and 100 degrees F more wind,,,it stopped just when it was needed,,hehe,,and FINALLY,, they enacted a state of emergency here so that none can sell or posses firworks ,,all them freakin IDIOTS wont be able to start AS MANY fires!

[brian eiland]

Originally Posted by Meanz Beanz

... both of which I have seen running on videos. The reason they are challenging is that they both claim over unity, something that is held as impossible by the scientific community. Over unity simply means they can generate more power than they consume

Yes I have a problem with that 'over unity' concept as well coming from a scientific background...but need to keep an open mind

A few more 'clips' from that video of the energy meeting:
At time frame 1:25
Shai Agassi speaks about the electric car project he has convinced the country of Israel to adopt. And interestingly the separation of the battery from the electric vehicle itself, thus the battery becomes a consumable like gas was for current vehicles. Also modeling the project on some basis like the mobile phone market. His website Project Better Place
..alternately here is the YouTube presentation of this segment http://www.youtube.com/watch?v=-oTyEhIPPPY

At time frame 1:30
A representative from Denmark talks about their past bout with oil energy and how they began attacking the situation quite some time ago. Also Windmill energy generation.

At time frame 1:47
Shai Agassi's estimate for electric cars in USA under a dedicated power systems approach & energy transmission question.

At time frame 1:57 to 2:01
Inevitable trend lines

[the1much]

instead of a "gas station" or a place to recharge ya battery,,,,have a "exchange" station,,where ya exchange your dying battery for a replacement thats already charged,,,,hmmm,,,,im like a thinkin genius ,,hehe

[Meanz Beanz]

Originally Posted by masalai

I feel a little more relaxed (mum is in "care" for 2 weeks "respite break").... Heinz, If you are coming up to "Bananabender Land" give me a call & I will shout you lunch - IOU....

That could be on the cards this year

More on oil...

In reality futures speculators will play any arbitrage situations that are created between the near month and the spot market. If it ever gets to far out of check they will take quick profit by driving it back into line with spot. The spot market trades real stuff now... on the spot, so its the bench mark.

Wow I saw a "defend the speculators" article... ??!!!!

http://money.cnn.com/2008/06/27/news...ion=2008062709

A more basic misconception in Washington involves what these so-called speculators are really buying. They're not buying oil, they're buying futures, and this is a crucial distinction. A futures contract is an agreement between a buyer and a seller to deliver a set amount of oil - typically 1,000 barrels - at a specific price on a specific date. The value of that contract rises and falls, depending upon market conditions, right up until the date of delivery.

Thing is, the pension funds, index funds, hedge funds and other so-called speculators almost never take delivery of any oil. The typical investment fund will buy, say, the August oil future and then sell it days before it comes due - typically rolling over the proceeds into the next month's contract.

"For speculators to be propping up the price of oil, they somehow have to be taking physical oil off the market," says energy markets expert Craig Pirrong, a finance professor at the University of Houston's Bauer College of Business.

But as New York Mercantile Exchange Chairman James Newsome explained to Stupak's Congressional committee, today's speculators are evenly split between shorts and longs. Moreover, the percentage of futures contracts held by speculators (as opposed to commercial traders) "actually decreased over the last year," Newsome told the subcommittee, "even at the same time that [oil] prices were increasing."

I know I'm a bit rabid about this one but its sooooooo important that we get this issue right and are not side tracked by the copious amount of BS floating around....

Although some will say thats what this thread is....

right Frosty U auld gumboot U

[Meanz Beanz]

Originally Posted by brian eiland

Yes I have a problem with that 'over unity' concept as well coming from a scientific background...but need to keep an open mind

LOL... that one sends the professionally trained up the wall by my observation! Makes them

Maybe something else is going on that is yet to be understood, i.e. Maybe its not theory shattering stuff but there is somehow another dimension (for want of a better word) to this puzzle. but what would I know!

I don't know.... its beyond my realm completely!

Either way the water hammer is a neat cheap way to get hot water!

Cheers
Mbz

[masalai]

Hello the1, Heinz, Brian, All & sundry - - hehe - - I am in Brisbane for a bit of (none of your business)..... **** it is colder down here (just 130km south and 5 - 8 degrees Celsius colder WTF?)...

The only way I can see the oil market can be "played" to extremis, is to charter 30 to 50% of the oil-tanker capacity, buy and fill them with oil and anchor them somewhere "safe"..... When the remaining shipping cannot cope with demand and thge price goes through the roof - sell the cargo and deliver at a huge profit.... The only problem is too many people would get to know of this and just attack your boats and STEAL the goods or kill the money-man and take the goods - first in gets the pick - - and who has that kind of money to do such a thing - the likes of Bill G????? and the rest of the top 50 wealthiest?

[Meanz Beanz]

Oh yeah... and about my contention that OPEC have been lying about reserves that was met with raise eyebrows. This is not tin foil hat wearing stuff, it is a well known and understood phenomena in the industry.

The IMF allude to the problem here...

Data problems have also added to uncertainties. Weaknesses are particularly prevalent in relation to data on supply, stocks, and exports, as non-OECD countries have no obligation to supply data to the IEA.

Read more here...

http://www.theoildrum.com/node/3665

Saudi Aramco’s propaganda campaign is failing. Saudi Aramco is no longer the world’s leading crude oil producer. Saudi Aramco’s statement of 260 billion barrels of remaining recoverable reserves is almost certainly false. Instead, the remaining recoverable crude oil reserves are probably less than 100 Gb, instead of 260 Gb. It is time to call on Saudi Aramco and the other OPEC members to tell the truth about their reserves.

and here..

http://www.washingtonmonthly.com/fea...0506.drum.html

Simmons himself avoids such speculations, but in other respects, he seems comfortable in his contrarian role. As the CSIS report implies, he is skeptical that magical new technologies that will allow oil companies to substantially reinvigorate old fields outside Saudi Arabia, and he does believe the Saudis themselves are either lying or in serious denial about their own future capacities--and that the rest of the oil industry has lazily taken their assurances at face value for years instead of investigating them closely. He also implicitly puts the question to his skeptics: If the Saudis are so anxious to soothe the world's fears, why don't they produce the detailed field-by-field reports, test-well analyses, and exploration results that would convince everyone they're telling the truth?

It all started with the reserve based quota system, basically OPEC agreed that they would each pump in proportion according to their reserves, a sound enough idea except without an umpire it created a moral hazard. Lie about your reserves and you make more money, so they all went home and busily bent and extended the truth so that they could supply more as required.

Now they want to make the most that they can from oil without killing the market thus they continue to maintain that reserves are good while supply is OK. The game is to keep prices as high as possible without causing a panic spike (damaging in the short run) or fostering the development of any serious competition to oil (damaging in the long run). Thus the lies about production and reserves are perpetuated in there own self interest, the game is to keep oil just high enough but not too high. This Frosty my auld gum boot is why you can't trust the official spin, and why we are in the dark about how much oil there actually is.... nobody, but nobody has complete information because a part of everyones data (yes even the Saudis are lied to by the others in OPEC and so it goes) comes from a politically motivated source. Stunning ain't it?

International trade is war with money and some loose rules, as in all wars truth is often the first casualty.

[Meanz Beanz]

Originally Posted by masalai

of the oil-tanker capacity, buy and fill them with oil and anchor them somewhere "safe".....

They did it in the 70's also it paid them to slow ships down when things where tight.... when/if hording kicks in this could be ugly.

Iran is supposed to be doing it now.... but to what ends?

Cheers
MBz