<Sunday night/Monday morning Open Thread...The Oil DrumKatrina on Monday morning>

37 comments on Oil at $70, NG close to $12 on NYMEX in Sunday pre-market

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Prof. Goose on August 28, 2005 - 4:26pm Permalink | Subthread | Comments top
what are folks thinking the market will look like on Monday?  Big sell off in everything but energy, right?  
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Anonymous on August 28, 2005 - 4:43pm Permalink | Subthread | Parent | Comments top
Energy companies not losing supply from the Gulf, yes - this Monday really has the potential to be ugly. (Also, metals and mining should benefit obviously).

For companies losing production in the Gulf, even temporarily, I'd say it's a slight negative (but not as negative as this will be for the rest of the market).

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louGrinzo on August 28, 2005 - 4:45pm Permalink | Subthread | Parent | Comments top
Chaos.  Trying to predict anything more specific than that for Monday would be throwing a dart with your eyes closed.

Frankly, I don't much care.  The markets will go nuts for a few days, wild swings, predictions all over the map from experts who don't really know what they're talking about--and then they'll sort themselves out.  My concern is for the people in NO and the general area; their situation won't become orderly and comfortable again nearly as soon as will that of the energy markets.  If we see the kind of storm surge that various weather experts are predicting (15 to 25 feet are the numbers I've heard), and that hits NO, it will be a very, very bad scene.

As of right now, all of us, including me (born and raised in the NE US, with the NY accent to prove it) should declare ourselves Louisianans and pledge to give to the Red Cross or similar relief organization until it hurts.  

It's time for The Oil Drum to make the transition from being a bunch of people with similar interests to being a community.

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Prof. Goose on August 28, 2005 - 4:51pm Permalink | Subthread | Parent | Comments top
that's well said, Lou.  I just had the markets on my mind with the bloomberg post, so I hope you didn't think me too insensitive...
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Prof. Goose on August 28, 2005 - 4:53pm Permalink | Subthread | Parent | Comments top
and also, if any of you have any ideas about the community building aspect of this, please don't hesitate to suggest them.  We'll probably have an open thread tomorrow...there's going to be a lot of people that are going to need our help.
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Glenn on August 28, 2005 - 5:05pm Permalink | Subthread | Parent | Comments top
I posted comments in the last thread about this (http://www.theoildrum.com/story/2005/8/28/142740/197#1), but really reducing demand in a very real way domestically is the only quick way to reduce price.

Governmental, community and business leaders should all take steps to reduce consumption as deeply as is possible without disrupting critical economic activities. Together we can beat back the impact of high prices with the one weapon we have - reducing waste and unnecessary consumption.

Even opening the SPR will take months to impact the supply problems.

Lou, PG, and all Oil Drummers (or dare I say, Citizens for Sustainable Living?), this is our chance to have an impact. Contact your local officials and ask them to find ways to conserve fuel. Contact your federal officials (www.senate.gov, www.house.gov) and send them something like this:

"With Katrina threatening to cut oil and gas supplies significantly (10-20%) for months if it causes severe damage, I urge you to push for all reasonable ways to reduce consumption of gasoline instead of opening the SPR. Decreasing demand voluntarily is the quickest way to keep prices stable in the short term. For more information, see www.theoildrum.com"

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mw on August 28, 2005 - 5:06pm Permalink | Subthread | Parent | Comments top
Adding to the charts I posted on another comment thread, here's what the open is likely to bring:

  • gap down for the broader market - between 1/2 and 1 percent; perhaps reverses intraday but the market has been pointing lower anyway so nothing in this week's news (except for the miraculous) is likely to turn that sentiment for longer than a short term bounce.

  • energy may even sell off in sympathy, certainly there will be a little pressure on any company that has a majority of assets in GOM / affected areas -- sometimes sympathetic selling catches the entire sector up for a while.

  • ultimately I would think domestic natural gas producers with no GOM exposure will fare the best. Probably EnCana will be among the leadership stocks there, but there are others. Canadian crude suppliers ought to come out of this looking sweeter too, within not too long.

  • The US Dollar will probably hold its weakness (off near half a percent) -- it had been trying to hold support last week > 87.50 on the DXY index - currently its testing these lows right now. Gold will no doubt benefit some as a result.

  • There may be some Lowes / Home Depot etc bounces but that's not my cup of tea except for short term plays.

What really matters is whether public perception is finally tipping the scales to "oh my, there's not enough black gold" around. Before this event I do believe we'd be on safe ground in assuming that the vast majority of market analysts and strategists have little exposure to the concept of peak oil. Simmons book and this event may do more for awareness than could possibly have been planned for, unless Simmons decided to release it near hurricane season 'just in case'.

When the herd switches directions in thinking in a hurry, it can be frightening.

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