Re: CNN on

[sartesian <sartesian@xxxxxxxxxxxxx>]

That's hilarious, Shane.  Especially since many peak oil theorists who
think the peak is 10 or 40 years away now, or who thought the peak was
10 or 40 years away in 1969 thought those time frames were/are driving
past/current price spikes.  And that seems plausible, but we want to
know why hurricanes in the gulf that forced the shutdown of several big
platforms and damaged refineries caused a spike in futures?

In 1999 the peak theorists were proclaiming that the approaching peak
(2000, 2001) brought the prices back from below $10/barrel.  So the
market priced in an 8 year future based on what? The rationality of the
participants? Their great knowledge of the real limits of geology?

But to answer you question why should short term effects have any
bearing?  Here's the short answer(s) for short term effects: 1. fear and
greed.  2. because it can.  3. because "should" has nothing to do with
it. 4. because the "rationality" of the market is nothing but a bi-polar
disorder where all the oscillations are about separating fools and
money. 5. because the market is all about what the market will bear.  6.
because refinery capacity has been effectively reduced in the US over
the last 20 years. 7. because short-term/long-term price inflation in
oil is no different than short-term/long-term price inflation in...
copper, corn, info technology stocks, dotcoms, container ship daily
rental rates... the list goes on and on...let's just say....
commodities. 8. because price is all about rearranging, redistributing
profit.




----- Original Message -----
From: "Shane Mage" <shmage@xxxxxxxxxxxx>
To: <PEN-L@xxxxxxxxxxxxxxxx>
Sent: Friday, September 14, 2007 10:46 PM
Subject: Re: [PEN-L] CNN on


> "S. Artesian" wrrote:
>
> >And the evidence?  Right, right oil futures at $80.99.  Has nothing
> >to do with hurricane season, impact of Humberto on US refineries and
> >Gulf Coast production.  It must be the end of the oil era.
>
> And why should the short-term effects of a minor hurricane have any
> bearing at all on the expected price of oil three or six months, or a
year,
> in the future?
>