Comments on: It’s Amazing How Quickly Things Can Change

By: Joe

Joe — Tue, 23 Dec 2008 22:38:47 +0000

Higher/Lower oil prices: It just goes to show you that the price you pay at the pump HAS NOTHING to do with the cost of producing the oil.

All that oil price rise is just a combination of gouging by the oil countries, the oil companies, and the speculators.

ANYTHING over one dollar a barrel is just a ripoff.

By: kitty

kitty — Sun, 21 Dec 2008 15:23:00 +0000

@Jeremy – it’s actually quite easy. When everyone predicts $200 a barrel oil, it’s time to short oil. When you hear predictions of $20, it’s time to buy. I plan to increase my holdings of some of energy-related stocks. Not too much, mind you, and only established companies with good dividend.

Cramer said this Friday – I don’t normally watch him, but I was on a Jet Blue plane on Friday, and his was the most entertaining thing on a little TV in front of my seat – that if he were the president, he’d buy oil now and increase the US oil reserves. Unfortunately, I doubt our government will be smart enough to do it.

@Jon – “but I wonder how much of the subprime crisis itself was caused by the oil bubble”
The oil bubble contributed to the slowing economy just as the credit crisis did, but the credit crisis is independent of oil. Real estate prices started falling before the oil bubble, the value of mortgage-backed securities started dropping before the oil bubble; Lehmann’s failure had nothing to do with the oil bubble.

By: Stacey

Stacey — Fri, 19 Dec 2008 16:07:21 +0000

Jon, I was thinking the same thing. Household budgets only go so far and if it’s choosing gas (when it was $4+/gal) for the car to get to work or paying the bills, what would most people who are up against a wall pick?

By: Jon

Jon — Fri, 19 Dec 2008 14:21:19 +0000

I’m surprised that the oil bubble hasn’t received more attention as a cause of the credit crunch. It’s pretty much been pinned on the subprime crisis but I wonder how much of the subprime crisis itself was caused by the oil bubble.

By: harm

harm — Fri, 19 Dec 2008 10:51:27 +0000

Tough times in Iran, Russia and Venezuela?
Wait till they discover deficit spending
What will oil do? I have the answer, it will either
go up or down in price, or it will stay about the
same. There, I’ve made a prediction that is just
as good as those of any CNBC commentator…..

By: Mark

Mark — Fri, 19 Dec 2008 05:57:14 +0000

I think speculators along with demand helped drive the price up and the lack of speculators and demand is driving the price down. All of the analysts that predicted oil would not decrease in price are now predicting that oil will not rise either. I don’t trust the $20 predictions anymore than the $200 predictions.

By: Jeremy

Jeremy — Fri, 19 Dec 2008 05:01:49 +0000

I just read in Forbes, but I can’t remember the company/analyst that said it, but back in May, just over 6 months ago, their target price for oil was $200. They just recently revised their target to $45.

It just makes me laugh. People love to throw out numbers and predict the future when most have absolutely no clue. I’m sure we’ll be back to $150 oil again, and we might subsequently drop again. If anything is certain, it’s that nobody knows exactly what the future holds, and the people who make bets based on short-term trends, whether traders, analysts, or consumers, will often lose.

I remember seeing a story on the news about a local family who almost all lost their lives and lost their home because they were stockpiling gas in containers in their home when it accidentally caught fire. It’s amazing that they were that stupid to begin with, but I bet they really feel like idiots now that just a few months later gas has dropped to levels we haven’t seen in years.

As Ron White would say, you can’t fix stupid.

By: rubin pham

rubin pham — Thu, 18 Dec 2008 21:07:09 +0000

what goes up must come down.
so far this is true for the real estate and oil bubble.

By: JLP

JLP — Thu, 18 Dec 2008 19:47:39 +0000

Jimmy,

I agree 100%!

Philip,

I think that demand is down and that’s the reason why refiners are struggling. But, I don’t know the math involved with gasoline refining so I really don’t know the answer to your question.

By: Philip

Philip — Thu, 18 Dec 2008 19:41:46 +0000

Ok, so if a barrel of oil has gone down in price then a refiner that makes the end products has access to cheaper raw material (oil) to produce with. Why are those companies that are refining having such a difficult time right now too?