<Some history on Coal EROI and UK coal numbersThe Oil DrumDrumBeat: July 10, 2007>

122 comments on The International Energy Assocation's Medium-Term Oil Market Report

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Nate Hagens on July 9, 2007 - 4:11pm Permalink | Subthread | Comments top

For what its worth, front month crude (WTI) was down 75 cents today while crude for 2012 delivery was up 50 cents to an all time high ($72.30) today. Perhaps someone with money that doesnt read TOD read the IEA report....

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damac on July 9, 2007 - 5:11pm Permalink | Subthread | Parent | Comments top

That seems highly odd. By the IEA's assessment, given even moderate economic growth, demand outstrips supply by 2010.

Two and one half years away. That's the blink of an eye.

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ThatsItImout on July 9, 2007 - 5:39pm Permalink | Subthread | Parent | Comments top

Nate Hagens quotes market at $72.30 crude for 2012 delivery...
Astounding, that would not even be rising to match
inflation! Astounding. If crude oil is "only" $100 per barrel
by 2012, for all practical purposes, that will be a pizz in the
sea compared to inflation in all other sectors.

In the meantime, check out todays market action on PV solar, text from
post to some of my own market friends

IS THE BIG MONEY COMING TO SOLAR?
One day moves on solar PV today 7/9/07

Canadian Solar Inc. +8.87%
Evergreen Solar Inc. +6.09%
First Solar, Inc. +23.94%
JA Solar Holdings Co., Ltd. +14.79%
LDK Solar Co.Ltd. +8.47%
Solar Enertech Corp. +6.49%
Solarfun Power Holdings Co. Ltd. +11.38%
Suntech Power Holdings Co. Ltd. +4.16%
Trina Solar Ltd. +16.00%

Notes:
First Solar went from normal volume of 1.98 to 9.0 million shares.
JA Solar went from normal volume of 1.72 to 4.0 million shares.
Canadian Solar went from normal volume of 241,279 to 862,894
shares. Volume increases were almost across the board.

The most astounding move must be consided First Solar
with a Price to Earnings (P/E) ratio of 516.62
Have not seen that sort of thing since the dot com days!

It is hard to believe that these kind of price moves and volume changes are
being triggered by the little "solo" investor, all calling logging on Schwab or
Scottrade at the same time.

We are now near or at a tipping point. The REALLY big money will be made early in this game, and will move in fast. Sadly, for me, I do not have the spare money at this time to take advantage in any big way, but for those that do, keep your eyes open! Of course, the "safe harbor" caveats still apply. Past performance does not predict, all investment involves risk, outside conditions could substantially change...
yada, yada, but keep your eyes open! :-)

Roger Conner Jr.
Remember, we are only one cubic mile from freedom

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noutram on July 9, 2007 - 6:15pm Permalink | Subthread | Parent | Comments top

Nate, I'm not an expert but I have read about Options and traded them a few times.

Correct me if I'm wrong but futures in no way 'predict' the value at any given date, rather they are an indication of the probability of a future price based primarily on the current price, variability of price and how long into the future you are projecting.

The fact that Futures are not showing $120 a barrel for 2012 delivery in no way reflects the possibility that that is what the price will -or won't be... I.e. Futures are not a crystal ball for oil price somewhere down the line -to use them as such is highly misleading, especially as availabilty of the underlying asset may be reaching what could only be described as a 'chaotic boundary' or at best tipping point.

NEW SCIENTIST: On another note there is a cover story/article in this weeks UK New Scientist regarding how we are going to survice 'after oil. There's an interesting pie chart that shows the 3.4% petrochemicals market worth $375Billion - about the same as the 70.6% market for transport fuels. The article proposes that the feedstocks to the latter industry can come from Bio-based sources if the price of oil stays up around the $75 mark....

Nick.

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docscience on July 10, 2007 - 12:00am Permalink | Subthread | Parent | Comments top

DocScience

The price of a futures contract for what ever future month you are looking at, is just the dollar amount that people right now, are willing to buy and sell it for.

If the traders buyers and sellers think that the future amount will be much higher, they will buy or sell accordingly to what they can afford or according to the risk that they wish to take. The reason that the futures contract is $72.30 crude for 2012 delivery, is that is what the present buyers and sellers are willing to pay for that contract.

Those readers of "oil drum", who are sure that oil prices will be much higher in 2012, and were able to buy contracts for then, have bought them at the $72.30 or less, and only need to hold on to them until oil is high enough to sell out for a profit. They only bought as much as they could afford, and that has kept the price from rising much higher.

There is also the risk that if we have a complete monetary crash before then, those who bought 2012 contracts , can’t get there money out, losing it all.

.

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Jack on July 10, 2007 - 2:49am Permalink | Subthread | Parent | Comments top

Of course futures don't accurately predict the future. Nothing does.

However, broadly speaking future prices do give a more accurate view point of future price direction than any other forecasting method (except for looking backward, finding who was right and then saying that person is better than futures markets).

I haven't seen any quantitative studies regarding oil futures, however, there is good documentation that currency forcasters are not, over time, able to out forecast currency futures.

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