May 16, 2006
SO MUCH FOR PEAK OIL:
IEA could cover cutoff of Iran oil for 4 years -DoE (Chris Baltimore, 5/16/06, Reuters)
The 26 countries that belong to the International Energy Agency could cover any disruption in Iran's crude oil exports for more than four years, a U.S. Energy Department official said on Tuesday."When you take all of the stocks that all of the countries hold together in the IEA, we have the ability to meet a complete shutoff of Iranian oil for over four years," Karen Harbert, assistant secretary for policy and international affairs at the Energy Department, said at a hearing before a House Government Reform Committee panel.
Demonstrating that today's prices are a function of speculation, not supply.
Posted by Orrin Judd at May 16, 2006 9:58 PM
I'm the least conspiratorial person in the world, but there is just something odd about the persistently high price of oil, and in the pattern of secular retreats followed by renewed buying.
Posted by: David Cohen at May 16, 2006 10:06 PMFurther demonstrating that the IEA countries have been stockpiling since 2001 in anticipation of this moment.
Posted by: ghostcat at May 16, 2006 10:27 PMThere is some connection (a thread perhaps) between Hugo Chavez, the rise of Islamic turmoil in Nigeria (on the coastline, no less), and the terror masters in Iran. And if the price of oil slips down to $65/barrel, ol' Mahmoud makes another outrageous statement, and presto, it's back up to $70 that afternoon.
Obviously, that has nothing to do with the issue of refineries, currency, Chinese and Indian (and Japanese) demand, but it has something to do with something. 'Nuff said.
Posted by: ratbert at May 17, 2006 12:10 AMHow large is the market for oil compared to the amount of money washing around the world's financial system? Traders have money to play with, so they do.
Posted by: joe shropshire at May 17, 2006 2:07 AMToday's prices are a function of relative uncertainty regarding supply. Speculation follows.
Posted by: Tom C.,Stamford,Ct. at May 17, 2006 7:10 AMExcept that there isn't uncertainty, just speculation.
Posted by: oj at May 17, 2006 7:41 AMoj-
Why would you 'speculate' on the short term price without news driven uncertainty regarding short term price volatility?
Posted by: Tom C.,Stamford,Ct. at May 17, 2006 7:53 AMBecause it's not particularly hard for a few investors -- including hedge funds -- to drive prices irrespective of supply, for at least a while, and create the appearance, even to themselves, that the higher price is natural.
Posted by: oj at May 17, 2006 8:04 AMoj-
The only reason you bet on the price today is because you think it will be higher tomorrow. If you're wrong, you lose money.
Posted by: Tom C.,Stamford,Ct. at May 17, 2006 8:12 AMoj-
The only reason you bet on the price today is because you think it will be higher tomorrow. If you're wrong, you lose money. If you're so convinced that you're right than go short and make some dough.
Posted by: Tom C.,Stamford,Ct. at May 17, 2006 8:15 AMLend me some and I will.
Posted by: oj at May 17, 2006 8:16 AMIt doesn't take much. Just be ready to lose it.
Posted by: Tom C.,Stamford,Ct. at May 17, 2006 8:20 AMNo one ever loses money betting that commodity prices are going down over time.
Posted by: oj at May 17, 2006 8:24 AMCommodities are cyclical. I think you may be too young to remember the last up cycle. They can last as long the preceeding down cycle.
Posted by: Tom C.,Stamford,Ct. at May 17, 2006 8:32 AMoj-
BTW, I'm not saying you're wrong just that you shouldn't be so sure of your position.
Posted by: Tom C.,Stamford,Ct. at May 17, 2006 8:33 AMYes, I'm aware I'm not wrong:
"The 26 countries that belong to the International Energy Agency could cover any disruption in Iran's crude oil exports for more than four years, a U.S. Energy Department official said on Tuesday."
Posted by: oj at May 17, 2006 8:43 AMOf course, IEA spokesperson can't specualate on what effect such a supply cut-off would have on prices. Hmm...let me guess.
Posted by: Tom C.,Stamford,Ct. at May 17, 2006 9:03 AM