Comments on: Goldman Forecasts Oil to Reach $150-$200 a Barrel http://www.nakedcapitalism.com/2008/05/goldman-forecasts-oil-to-reach-150-200.html Mon, 23 Nov 2009 06:07:28 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: Yves Smith http://www.nakedcapitalism.com/2008/05/goldman-forecasts-oil-to-reach-150-200.html#comment-7657 Yves Smith Wed, 07 May 2008 05:37:00 +0000 http://www.nakedcapitalism.com/2008/05/goldman-forecasts-oil-to-reach-150-200-a-barrel/#comment-7657 Juan,<br/><br/>That is VERY helpful, thanks!<br/><br/>One of the problems that those of us with a securities background have is not being able to sort out signal from noise in the commodities arena. It's pretty clear that speculation is having a price impact, but how much is the key question. Juan,

That is VERY helpful, thanks!

One of the problems that those of us with a securities background have is not being able to sort out signal from noise in the commodities arena. It’s pretty clear that speculation is having a price impact, but how much is the key question.

]]> By: juan http://www.nakedcapitalism.com/2008/05/goldman-forecasts-oil-to-reach-150-200.html#comment-7653 juan Wed, 07 May 2008 02:55:00 +0000 http://www.nakedcapitalism.com/2008/05/goldman-forecasts-oil-to-reach-150-200-a-barrel/#comment-7653 The article presents a (sloppy) supply/demand argument, as though this relation is price determinant even though there has been no free market in crude oil for close to a century when taking account of the 1928 Achnacarry and Red Line agreements at the international level or, earlier still, the Texas Railroad Commission's role.<br/><br/>The heart of the present pricing system happens to be the futures markets which, in contrast to Goldman's claim, one might imagine to be open to financial pressures, even self-fulfilling, story providing, momentum. (But then, as one of the InterContinental Exchange's launch partners and no slouch in the commodity trading arena, GS is no doubt quite aware)<br/><br/>An instructive and concise (3 page) description of oil price regimes and their change can be found in Section 2 of the attached from an Oxford Institute for Energy Studies, March 2007, paper:<br/>http://www.oxfordenergy.org/pdfs/WPM31.pdf<br/><br/>Steve, on somewhat the same line, it would, I believe, be interesting to see what might transpire if the index funds were not able to circumvent position limits but required to reduce to, and remain within limits. I've a sense commodity prices would, well, decline but then there's really no reason to expect disconnected from real economy reality government to do this. The article presents a (sloppy) supply/demand argument, as though this relation is price determinant even though there has been no free market in crude oil for close to a century when taking account of the 1928 Achnacarry and Red Line agreements at the international level or, earlier still, the Texas Railroad Commission’s role.

The heart of the present pricing system happens to be the futures markets which, in contrast to Goldman’s claim, one might imagine to be open to financial pressures, even self-fulfilling, story providing, momentum. (But then, as one of the InterContinental Exchange’s launch partners and no slouch in the commodity trading arena, GS is no doubt quite aware)

An instructive and concise (3 page) description of oil price regimes and their change can be found in Section 2 of the attached from an Oxford Institute for Energy Studies, March 2007, paper:
http://www.oxfordenergy.org/pdfs/WPM31.pdf

Steve, on somewhat the same line, it would, I believe, be interesting to see what might transpire if the index funds were not able to circumvent position limits but required to reduce to, and remain within limits. I’ve a sense commodity prices would, well, decline but then there’s really no reason to expect disconnected from real economy reality government to do this.

]]> By: Steve http://www.nakedcapitalism.com/2008/05/goldman-forecasts-oil-to-reach-150-200.html#comment-7647 Steve Tue, 06 May 2008 23:01:00 +0000 http://www.nakedcapitalism.com/2008/05/goldman-forecasts-oil-to-reach-150-200-a-barrel/#comment-7647 ``Unfortunately, we do not think the energy crisis will be solved by finding and punishing the big bad speculator.''<br/><br/>This could be tested -- by forcing liquidation-only settlement of oil and related futures.<br/><br/>At least we'd know. :-) “Unfortunately, we do not think the energy crisis will be solved by finding and punishing the big bad speculator.”

This could be tested — by forcing liquidation-only settlement of oil and related futures.

At least we’d know. :-)

]]> By: Anonymous http://www.nakedcapitalism.com/2008/05/goldman-forecasts-oil-to-reach-150-200.html#comment-7637 Anonymous Tue, 06 May 2008 18:33:00 +0000 http://www.nakedcapitalism.com/2008/05/goldman-forecasts-oil-to-reach-150-200-a-barrel/#comment-7637 The strikes in Nigeria and the UK took about 300,000 barrels per day out of the market supply for May. This is on top of worldwide production declines in March and April. That means prices go up.<br/><br/>We will probably see a consolidation in June, because we have some extra supply coming on then. <br/><br/>I hope you got hedged during the price drop, Yves.<br/><br/>Moe Gamble The strikes in Nigeria and the UK took about 300,000 barrels per day out of the market supply for May. This is on top of worldwide production declines in March and April. That means prices go up.

We will probably see a consolidation in June, because we have some extra supply coming on then.

I hope you got hedged during the price drop, Yves.

Moe Gamble

]]> By: doc holiday http://www.nakedcapitalism.com/2008/05/goldman-forecasts-oil-to-reach-150-200.html#comment-7626 doc holiday Tue, 06 May 2008 15:25:00 +0000 http://www.nakedcapitalism.com/2008/05/goldman-forecasts-oil-to-reach-150-200-a-barrel/#comment-7626 This story is such crap, filed with feces, but at least Yves calls it right by calling attention to the lies: "``helping to solve the energy crisis".<br/><br/>This link below to calculated risk is about a month old (april 24) and it represents the total lack of understanding as to how to predict oil prices or model economics; obviously S&P is a worthless data distortion conduit!<br/><br/>http://calculatedrisk.blogspot.com/2008/04/s-oil-at-91-year-end-50.html<br/><br/>Re: The American economy is in a recession, which is projected to be short and mild, while oil will likely trade at $91 a barrel by the end of the year, though the range of that forecast is plus or minus $50, Standard & Poor's said Thursday. <br/><br/>Goldman pumps it up long whole S&P plays the other end -- in the name of pure speculation and volatility, as these mafia crooks that conspire in collusion with The Bush Coup play games with every commodity, stock, bond, derivative, mortgage contract -- and then want you to bail out illegal aliens that were given keys to The American Dream........ this is Rome burning and as usual, no one gets it! This story is such crap, filed with feces, but at least Yves calls it right by calling attention to the lies: ““helping to solve the energy crisis”.

This link below to calculated risk is about a month old (april 24) and it represents the total lack of understanding as to how to predict oil prices or model economics; obviously S&P is a worthless data distortion conduit!

http://calculatedrisk.blogspot.com/2008/04/s-oil-at-91-year-end-50.html

Re: The American economy is in a recession, which is projected to be short and mild, while oil will likely trade at $91 a barrel by the end of the year, though the range of that forecast is plus or minus $50, Standard & Poor’s said Thursday.

Goldman pumps it up long whole S&P plays the other end — in the name of pure speculation and volatility, as these mafia crooks that conspire in collusion with The Bush Coup play games with every commodity, stock, bond, derivative, mortgage contract — and then want you to bail out illegal aliens that were given keys to The American Dream…….. this is Rome burning and as usual, no one gets it!

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