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95 comments on DrumBeat: November 11, 2007

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Leanan on November 11, 2007 - 11:26am Permalink | Subthread | Parent | Comments top

I think it depends on the inventory report. If it's much lower than expected this week, we'll have $100 oil. Though maybe only briefly.

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alanisthename on November 11, 2007 - 11:50am Permalink | Subthread | Parent | Comments top

Hi Leanan,

There are two possible causes for low crude inventory.

1. Demand for refined products is high.
2. Refiners see price/demand falling so start destocking crude. If they think the price will fall they will hold off.

The oil price slumped in 1997 when the Asian financial crisis happened because of destocking, and believe me, the economy is not doing well - the economists at the investment bank where I work see problems everywhere.

Maybe you are right, Leanan, but making money in the futures markets can never be easy. I'm back-pedalling from $100. It's just too neat and tidy for me. (I'm not a trader by the way!).

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Leanan on November 11, 2007 - 12:09pm Permalink | Subthread | Parent | Comments top

The causes for low inventory I'm thinking about are the disruption in Mexico due to weather (which will probably show up in the numbers this Thursday), and possibly shut-in production from Ursa and Mars (if the rumors are correct - Shell said they would issue a statement, but never did).

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Robert Rapier on November 11, 2007 - 12:35pm Permalink | Subthread | Parent | Comments top

I think it depends on the inventory report. If it's much lower than expected this week, we'll have $100 oil. Though maybe only briefly.

I don't think it will be as simple as that this week. There are several complicating factors. The inventory report will be a day delayed, and the December contract expires the next day. Then, we have OPEC meeting at the end of the week. I think all of this will make it very tough to gauge what's going to happen this week. But with the contract expiring, I expect people to take profits, and if there is a bad inventory report the upswing will be tempered by those wishing to take profits and avoid getting stuck with delivered barrels.

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Moe_Gamble on November 11, 2007 - 3:23pm Permalink | Subthread | Parent | Comments top

Plus, for the reasons musashi points out below and others, there are stock market problems and dollar moves that will likely put pressure on the price.

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musashi on November 11, 2007 - 2:41pm Permalink | Subthread | Parent | Comments top

This week is going to be strange. The time release MOAB hits Wall Street on thursday (FAS157). Maybe we see a couple dead cat bounces, but then ..........

 

http://www.cfo.com/article.cfm/10097878/c_10098290

 

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Samsara on November 11, 2007 - 10:09pm Permalink | Subthread | Parent | Comments top

What's the chances they will "Table" FAS157 for a year?
Saying that it's for "The Common Good" or something?

John

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musashi on November 12, 2007 - 12:19am Permalink | Subthread | Parent | Comments top

IMO zero, if they change it now it would be the same or worse, like the regulators openly admitting that they are in bed with the fraudsters.

They can game it by fiscal year date to a point, so there is a built in delay, but on the other hand as soon as one is marked to market they all are.

I'm sure you know what they are worth.

Another opinion.
http://market-ticker.denninger.net

Hong Kong is down, Tokyo is down big time and the yen just broke 110 ..... 109.97 ..... that was a bit of a resistance point sort of like 100 oil.
Ms Watanabe is going to need her sake tonight.

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Zoe di Magnifico on November 12, 2007 - 10:58am Permalink | Subthread | Parent | Comments top

"Ms Watanabe is going to need her sake tonight."

What do you mean by that? It depends on whether Ms Watanabe has the bulk of her portfolio in stocks or cash. If she has yen collecting dust in the bank, she will in fact be toasting with her sake and maybe some bubbly, rather than gulping it down. The yen is rising, because the carry trade is unwinding due to market turbulence, and look for a New Year's rate increase from the BOJ. With peak oil, faltering US consumer spending and increasing buying power in Europe et al, Japan now needs a weak currency to drive exports much less than it does a strengthening yen to offset rising energy costs. The yen has been lagging behind other currencies' rises, and now it is poised to take off. 109 is nothing. Wait till it gets below 100 JPY/USD next year. You'll be able to tell by the numbers of Japanese tour groups that suddenly swarm European capitols next summer.

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musashi on November 12, 2007 - 2:27pm Permalink | Subthread | Parent | Comments top

It refers to a pretty recent FT? article that was widely circulated talking about Japanese house wifes day trading, specifically using the yen carry trade. They called her "Ms Watanabe".

The yen carry trade hasn't completely unwound yet, but with the margins the higher valued yen is a huge hill to climb.
If BOJ raises rates and BenDover lowers them some more we will have a Dollira (US peso?) carry trade.

You might be right in the short term, but Europe has huge problems in the longer term. What are they going to do with all the third world immigration once exports start to fall like a rock and the jobs go away?

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95 comments on DrumBeat: November 11, 2007

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