Hiding Bear Posted April 16, 2004 Author Report Share Posted April 16, 2004 Lately I've been pondering OPECs latest round of "cuts" and I'm beginning to wonder if they aren't so much cuts as they are a veiled reference to production peaking. All of the oil fields in the Middle East are geographicallly contained in an area about the size of Indiana. Horizontal drilling and water injection have been widely deployed for at least the last decade or more. Water injection in some fields has reached the point that they are now bringing up 9 times as much water as oil which greatly increases the cost of production when seperation is added in. One might note that North Sea production appears to be in decline. It is worth considering whether Russia may actually be carrrying the "swing" vote on oil these days. More than a 100,000 US troops in Iraq, but where are they? Hypertiger says they are guarding oil installations and pipelines. If so, the marginal cost of obtaining oil from the ME is somewhere about $100 a barrel - even if we disregard the costs of horizontal drilling and water injection. In a perfectly balanced money system, increased costs in one area would have to be offset by decreased expenses in other areas - so theoreticially increased energy costs should have an adverse effect on the economy. The part where the Fed uses injection methods of its own is what we have to worry about. Will they drill horizontally into savers accounts through a combination of higher inflation and lower interest rates - or will they just inject more fiat water down and flood the system? Either way real savers are in danger if they can not avoid the Fed, and either way the Fed can not create new wealth. Link to comment Share on other sites More sharing options...
Guest Posted April 16, 2004 Report Share Posted April 16, 2004 SJ district sends out 400 layoff notices San Jose Mercury News, CA - 2 hours ago ... notices out to everyone just in case. Layoffs, she said, will be determined by seniority. The notices were sent to ``classified ... http://www.mercurynews.com/mld/mercurynews...cal/8445564.htm Delphi earnings decline in first quarter; restructuring continues Detroit Free Press, United States - 6 minutes ago ... hourly work force by 3,750 thus far through retirements, flowbacks to GM and attrition. The goal for US operations is 5,000 job cuts. http://www.freep.com/news/statewire/sw96245_20040416.htm Link to comment Share on other sites More sharing options...
soup Posted April 16, 2004 Report Share Posted April 16, 2004 HTF do they always get their way? If this was not op ex week the dow would be South of 10,000, dover sole, well maybe, but they have moved heaven and earth to keep the dow and the spx propped. UFB, but actually very beleivable. Link to comment Share on other sites More sharing options...
Lock Limit Down Posted April 16, 2004 Report Share Posted April 16, 2004 HTF do they always get their way? If this was not op ex week the dow would be South of 10,000, dover sole, well maybe, but they have moved heaven and earth to keep the dow and the spx propped. UFB, but actually very beleivable. Option ex Soup Option ex Industrial production weker then expected Yup massage that bond The games go on Link to comment Share on other sites More sharing options...
brian4 Posted April 16, 2004 Report Share Posted April 16, 2004 Morning Crew-Helmets on, buckle up-window at the bell for 55 minutes. Todays expiration is a "Triple Witch" expect tons of volatility-trend is still DOWN-Lock n Load! Link to comment Share on other sites More sharing options...
Bearbones Posted April 16, 2004 Report Share Posted April 16, 2004 Industrial production and capacity utilization both fell in March. This is not your father's recovery. Link to comment Share on other sites More sharing options...
Hypertiger Posted April 16, 2004 Report Share Posted April 16, 2004 Here's a new way to deal with reports of declining energy production: Shell Officer Said to Have Ordered Report Destroyed By JEFF GERTH and HEATHER TIMMONS Published: April 16, 2004 WASHINGTON, April 15 - A senior executive at the Royal Dutch/Shell Group told a subordinate in an e-mail message in December that the employee's preliminary analysis of the company's oil and gas reserves problems was "dynamite" and "needs to be destroyed" because it was incomplete, a person involved in the company's internal inquiry said on Thursday. Battleship Shell Lately I've been pondering OPECs latest round of "cuts" and I'm beginning to wonder if they aren't so much cuts as they are a veiled reference to production peaking. All of the oil fields in the Middle East are geographicallly contained in an area about the size of Indiana. Horizontal drilling and water injection have been widely deployed for at least the last decade or more. Water injection in some fields has reached the point that they are now bringing up 9 times as much water as oil which greatly increases the cost of production when seperation is added in. One might note that North Sea production appears to be in decline. It is worth considering whether Russia may actually be carrrying the "swing" vote on oil these days. One little thought about inflation. The news is everywhere it seems. Is it akin to having the raging Bull appear on the cover of Newsweek? Everyone is either directly or indirectly supporting a debt inflated empire... Production cuts are to prevent a collapse of price...when the price collapses...exploration craters and causes thoes who are supporting debt inflated empires to pump more to make up the difference...further collapsing prices and exploration...Now if in fact there is an underlying shortage of oil (Plenty of mounting evidence) then pumping has it's limits on top of the rock bottom cost of maintaining the pumping/distribution infrastructure... A glut is highly debt deflationary...especially in the current economic enviornment where the required amount of debt inflation is barely being maintained... When the Fed says there is little inflation they are not lying...Their idea of what inflation is is far different then what you all understand inflation to be... In my opinion I would have to say debt inflationary potential is very weak...Rates will have to be dropped at some point to strengthen debt inflationary potential... Ultimately the system as it is currently structured will reach maximum potential within a year or so...then nothing will stop debt deflationary potential from flooding out and caving the system in...other than dump trucks full of money dumping piles of cash in various locations around the clock...and if they could actually start a hyperinflation it would only last a few months until it reached it's maximum potential and then at that point nothing could be done to stop a hyperdeflationary implosion of the debt based money supply...Not even GOD could stop it... Holding or rising rates only allows the ability for debt deflationary potential to overpower debt inflationary potential to be strengthened... The only real option is to crash rates as low as they can go in the hopes there will be enough volume to support them... Every day is just one day closer to checkmate... Link to comment Share on other sites More sharing options...
Guest yobob1 Posted April 16, 2004 Report Share Posted April 16, 2004 The decline in industrial production and drop in capacity utilization is a sneak peak at the lagging data coming to reveal the faltering economy. It's faltering right now and I expect that trend to worsen enough that even the "fudged" data we are fed won't be able to fully conceal it. Link to comment Share on other sites More sharing options...
K Wave Rider Posted April 16, 2004 Report Share Posted April 16, 2004 They doin' their best to paint the Dow with PG and CAT..we'll see how much longer it lasts.. Link to comment Share on other sites More sharing options...
brian4 Posted April 16, 2004 Report Share Posted April 16, 2004 Launch the Anvil Scotty- Aye Capt. Anvil away! Link to comment Share on other sites More sharing options...
K Wave Rider Posted April 16, 2004 Report Share Posted April 16, 2004 Blue is feelin' the same.. Link to comment Share on other sites More sharing options...
K Wave Rider Posted April 16, 2004 Report Share Posted April 16, 2004 NDX testing the floor again.. Link to comment Share on other sites More sharing options...
Lock Limit Down Posted April 16, 2004 Report Share Posted April 16, 2004 They doin' their best to paint the Dow with PG and CAT..we'll see how much longer it lasts.. CAT has been one of thier favs with of course IBM which I have many PUTS on that are coming my way They are trying to buy the BKX.X and HGX.X More informed and well timed investing..UFB BKX.X is key here If that turns look out below Link to comment Share on other sites More sharing options...
brian4 Posted April 16, 2004 Report Share Posted April 16, 2004 Direct hit-Capt- Deploying blast Shield-all ahead full! Link to comment Share on other sites More sharing options...
Lock Limit Down Posted April 16, 2004 Report Share Posted April 16, 2004 GSEs that are to big to fail as all informed investors know are catching a bid WONT LAST Link to comment Share on other sites More sharing options...
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