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79 comments on Higher Inventories but Demand Drop Slowing?

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paal myrtvedt on January 15, 2009 - 10:24am Permalink | Subthread | Parent | Comments top

Alright, back to my initial point.... Supply-Demand Gap. There is no such thing . Thats my point.

If a comodity is in short supply (acquiring-) price will go up , on the contrary it will go down. (basic trading knowledge).

Philosophy:
There is no gap in "anything" unless you set a "fixing point" - a standard "no gap" position. Think of a door, as long it's closed there is no gap, open it .... there you go, gap there is ... big / small defined by the angel of opening.

Lesson :
1) ... unless there is an universally accepted price for an oilbarrel at say 100$ there vil never be any gap in supply/demand.***That will happen every day***
2) or .. say if there is set a standard for "how many barrels that should be traded per day globally , say 85 mb/d" , one can start to argue "there's a gap" if there comes to a deviation from that number. ***That will happen every day***

So the idea of "a gap" has no value IMHO.

(I guess this gap-thing will continue, with or without my help :-)

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HFat on January 15, 2009 - 10:32am Permalink | Subthread | Parent | Comments top

Yes, this gap thing is somewhat silly. I figure it's a kind of colloquialism. But I'm sure you could understand what the poster above meant with this "gap", especially after it's pointed out to you that more storage is probably what is meant.

Words can have different meanings. There's no point in correcting people who keep using what you think are the wrong words over and over, is there?

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paal myrtvedt on January 15, 2009 - 11:34am Permalink | Subthread | Parent | Comments top

HFat ; "I figure it's a kind of colloquialism."
Yes, I could agree with this, if this oil-supply-demand-gap-definition was well defined and understood, but I don't think it is. Many readers (people) swallow the consept that there is "gap-oil" somewhere ...

The reason I made a sceene of this is that I find these gap-arguments very misleading , to the extreme actually.

See what Noutram asks here "...any views on when the Supply-Demand Gap will close back up at present rates?"
HFat ,do you understand this ?

"... Gap will close back up?" I ask : which gap ? and back to ... to where .... to what ....?

With all due respect to all / Noutram : I don't understand this gap-thing ! you all are talking about.

edit:
As for all daily global oilproduction there is always "a gap" between oil in progress/temp.stored oil and actual sold oil for thet very day. Today this gap is more than last summer. BUT that has nothing to do with this SUPPLY-DEMAND gap "we" are talking about , no ? In this case there is always a SUPPLY-DEMAND gap. Always.

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79 comments on Higher Inventories but Demand Drop Slowing?

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