<The Specter of Recession The Oil Drum DrumBeat: October 5, 2006>

67 comments on A slight feeling of disquiet

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expat on October 5, 2006 - 3:27am Permalink | Subthread | Comments top
And an article from http://www.bloomberg.com/apps/news?pid=20601072&sid=arzFS2l43sSc&refer=energy
suggests that oil prices (not refined products prices) are heading up because the amount of crude oil which can refined has been reduced after a refinery accident. And since U.S. refinery utilization was lower than expected, this also contributed to a rise in crude prices.

Am I missing something here - because the market now has more crude oil, the price went up? That is, higher supply leads to higher prices?

Again, I am only talking in reference to this article, not to OPEC's various moves.

Somehow, the information flow too is becoming very strange. This may also be a symptom of system oscillations, which is something to be expected around peak. Or peak plateau, for those who like to wear another chapeau

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Nagorak on October 5, 2006 - 3:56am Permalink | Subthread | Parent | Comments top
Well, this is the sort of bull that you hear all the time in the financial press.  It makes no sense at all, but some trader somewhere will make some assinine statement (or some financial reporter will claim that one did).  Whenever there are things like refinery problems it is cited as a reason for oil to go up in price.  

I guess maybe you could argue that futures might go up due to anticipated increased demand later to make up for a shortfall.  That is the only explanation I can think of, and I am not entirely sure it is a valid one.  Another possibility is a lot of people trading oil don't really have much grasp of how the system actually operates.  Or they understand it, but they're trying to anticipate what others will think, regardless of whether it makes sense or not.  

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expat on October 5, 2006 - 5:36am Permalink | Subthread | Parent | Comments top
I realize that the financial tends to be worthless, unless you are interested in bread and circuses of that type.

What I find interesting is how the information flows themselvers are starting to get unhinged - that is, in a number of areas, all reasons are considered valid explanations for what is happening. Oil prices are up because production is down, or oil prices are down because production is down.

At some point, the noise completely covers the signal. Whether we have reached this point (GAY REPUBLICAN CONSPIRACY!!! - see, noise) is harder to judge, considering how much of the American MSM has been full of little but noise for years. (ANOTHER MISSING BLONDE!!!) (BRITNEY, JESSICA, LINDS - is that with an 'e' or an 'a'? - inquiring minds don't care.)

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67 comments on A slight feeling of disquiet

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