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OPEC Intervention Time: Brent Hits $121.64

Tyler Durden's picture





 

Remember how OPEC promised it would immediately expand its "millions" in barrels in "excess capacity" when Brent passes $120? We are expecting a PR from Saudi Arabia it promises to releases it gobs of strategic reserves any...... minute.....now.......now.........NOW damn it. And to all our European readers, we offer our condolences for $10/gallon gas. Take it up with the Chairsatan... oh wait, the San Fran Fed just issued a paper saying the Fed is not, repeat not, responsible for $121 Brent. And the San Fran Fed is always, repeat always, correct. Oh well, it's all that perfectly inelastic demand for gas at surging prices then. Sorry.

 


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Mon, 04/04/2011 - 13:09 | Link to Comment HamyWanger
HamyWanger's picture

"San Francisco Fed says that rising commodity prices not due to Fed buying various assets under its QE2 programme"

As I've previously said, QE to infinity. 

Learn it, love it, trade it. DOW 18,000 in 2012.

Mon, 04/04/2011 - 13:15 | Link to Comment Robot Traders Mom
Robot Traders Mom's picture

That's funny. AAPL is getting slaughtered for about the 5th straight day. Because we all know that QE is never going to end, you should go warn the other trolls at the Huff Post and start doing some real work.

Mon, 04/04/2011 - 13:30 | Link to Comment umop episdn
umop episdn's picture

Even if teh troll is right, you run the risk of a doucheterious burger costing about 18,000 whatevers. Even if it does come with flies.

Mon, 04/04/2011 - 13:32 | Link to Comment slaughterer
slaughterer's picture

Do you hae a pair of knockers to go witht that avatar, RT'S mom?

Mon, 04/04/2011 - 13:33 | Link to Comment disabledvet
disabledvet's picture

market rules always apply.  And that does include "nat gas stays dirt cheap while oil soars."  Two men say they're....

Mon, 04/04/2011 - 13:25 | Link to Comment covert
covert's picture

all of the proceeds will be used to undermine Liberty.

http://covert2.wordpress.com

 

Mon, 04/04/2011 - 14:00 | Link to Comment Hugh G Rection
Hugh G Rection's picture

Was watching Fox News before work today.  Typical MSM bullshit, blaming high prices on investors/speculators.

 

How about stagflation and chaos bitches? Does that effect prices?

Mon, 04/04/2011 - 14:38 | Link to Comment dcb
dcb's picture

the speculators get theri money from the fed, sunny how that connection isn't seen.

Mon, 04/04/2011 - 13:11 | Link to Comment bob_dabolina
bob_dabolina's picture

Why would OPEC need to intervene?

Bernanke said this is from the robust and global econmic recovery.

Mon, 04/04/2011 - 13:11 | Link to Comment EscapeKey
EscapeKey's picture

I'm placing my bet on a "We, the OPEC, are comfortable with a $125/barrel price point" press release.

Mon, 04/04/2011 - 13:13 | Link to Comment 101 years and c...
101 years and counting's picture

Iran already said they cool with $150 oil.

 

Mon, 04/04/2011 - 14:08 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Thanks for telling us, I had not heard.

Why am I not surprised that Iran is OK with oil at $150...?

Mon, 04/04/2011 - 15:01 | Link to Comment kaiserhoff
kaiserhoff's picture

Eh mon, no problem.  Euro cars all come with pedals, anyway;)

Mon, 04/04/2011 - 13:13 | Link to Comment trav7777
trav7777's picture

we're going to ram into the overhead supply curve again as it declines.  Crash, then repeat.

Mon, 04/04/2011 - 13:33 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Spot on.  Everyone should know how to trade this.

Mon, 04/04/2011 - 14:18 | Link to Comment Mad Max
Mad Max's picture

We can call it "trading the decline and fall of western civilization, for millions of fiatscos in profits!"

Mon, 04/04/2011 - 13:36 | Link to Comment MachoMan
MachoMan's picture

Bingo...  our local economy (had lowest unemployment in the country through 09, at least, for 50k+ population) got cockstamped the last time oil rose...  everyone ate at home or brought lunches because travel at lunch time or afterward was too costly...  everyone ordered items from the internet and had them delivered, given the price increases in shipping were less than those immediately felt from gasoline...  tax revenues fell off a cliff.

Trav, at what point do we just break?  Do we just keep smacking our head all the way down?  I realize we're the kings of cognitive dissonance, but shit.

Mon, 04/04/2011 - 13:37 | Link to Comment Rusty Shorts
Rusty Shorts's picture

Trav, I know you're a big fan of West African culture. Fire.

http://www.youtube.com/watch?v=Xkl1G21i99c

Mon, 04/04/2011 - 14:00 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

 + $121.00

Right Trav.  Up and down.  

But, there is an ominous feel that Peak Oil (end of cheap oil as world demand picks up) will mean higher highs and higher lows.

Mon, 04/04/2011 - 14:18 | Link to Comment Mad Max
Mad Max's picture

Not really an ominous feel - that exact descent has been predicted for quite a long time.  We're just living it now.  The oscillating nature of both price and supply tends to kill the incentive to invest in production when supply permits, and the ability to usefully invest when price suggests.  This is one area where letting market forces control will kill off the market.

Mon, 04/04/2011 - 14:17 | Link to Comment Mad Max
Mad Max's picture

Yes, exactly.

Trav, ever thought about doing articles for ZH?  You are one of the regular posters who clearly has excellent knowledge of peak oil, and it would be nice to get a good article on the topic instead of MHFT's re-warmed Tuesday leftovers.

Mon, 04/04/2011 - 15:06 | Link to Comment trav7777
trav7777's picture

I've thought about it but never been asked

Mon, 04/04/2011 - 17:34 | Link to Comment Flakmeister
Mon, 04/04/2011 - 19:57 | Link to Comment ColonelCooper
ColonelCooper's picture

I'll read what you write.  Write the shit up, and submit it.  Just think, it won't take anymore time than you spend arguing anyway.

Mon, 04/04/2011 - 13:11 | Link to Comment ak_khanna
ak_khanna's picture

The only thing happening to Oil prices is that the big speculators and banksters are useing the events in Libya as an excuse to drive up spot oil prices which force the traders on the other side of the trade i.e. the buyers of put options, the sellers of call options and futures to cover their positions resulting in a sharp spike in the Oil prices.

The only thing driving up commodity prices worldwide are speculators armed with cheap money provided by central bankers and super fast computers. This is causing a havoc in the lives of rest of the population and pushing them towards poverty as they can no longer afford the basic necessities of life.

The stock, commodity and currency exchanges have been reduced to gambling dens whereby the more powerful traders with deep pockets move the markets to maximize their own profits at the expense of the remaining not so powerful players. The big boys have enormous money power to move the markets in the direction which results in maximum profits for themselves. They effectively use the media to lure the other players in the market to a position where they would incur maximum loss.


Regulators are either hand in glove with the banksters or are too slow to react and take ages to identify and take measures to solve the problems.

Total ban on speculation and the reinforcement of Glass Steagall Act is strictly required to bring relief to the man on the street.

http://www.marketoracle.co.uk/Article24581.html

Mon, 04/04/2011 - 13:21 | Link to Comment EscapeKey
EscapeKey's picture

From the IEA's oil market report. We're at the supply/demand crossover point, regardless of how much copypasta you intend to post.

http://omrpublic.iea.org/

 

Global oil product demand growth remains largely unchanged at 2.9 mb/d in 2010 and 1.4 mb/d in 2011, but high oil prices entail significant downside risks to this year’s outlook. Baseline changes in non-OECD Asia and stronger Middle East levels lift absolute demand slightly to 87.9 mb/d and 89.4 mb/d, in 2010 and 2011 respectively.

 

World oil supply rose to an all-time high of 89 mb/d in February, up 0.2 mb/d from January. Non-OPEC oil supply rose 0.3 mb/d to 53.2 mb/d on re-instated Alaskan output. 2010 non-OPEC estimates are left unchanged at 52.8 mb/d, while the 2011 forecast is raised by 0.1 mb/d, to 53.6 mb/d, on stronger-than-expected Canadian output.

 

Mon, 04/04/2011 - 13:55 | Link to Comment r101958
r101958's picture

Excellent post EscapeK and you are right. Oil production is in depletion mode...it is best we realize this fact. We need not demonize 'speculators' as for every buyer...there is a seller. The root problem is peak production has been reached....the rest is de nile river.

Mon, 04/04/2011 - 14:03 | Link to Comment r101958
r101958's picture

What the IEA fails to mention is that all of the 'gain' in production was realized from unconventional oil which is much more costly to bring to market than the inexpensive conventional light sweet oil that we have enjoyed the use of for so much of the last 80 years.

Mon, 04/04/2011 - 15:08 | Link to Comment trav7777
trav7777's picture

unconventional oil has a massive extra energy investment, aka lower EROI, aka it is to a large extent a translation of one form of energy for another.  You have to invest significant heat to get tarsands made into synthetic crude.

The growth in production since C&C peaked in 05/06 has been leveraging NG into oil, albeit at positive EROIs.

Mon, 04/04/2011 - 13:12 | Link to Comment The Axe
The Axe's picture

OPEC can't and won't do shit....

Mon, 04/04/2011 - 13:15 | Link to Comment Dan The Man
Dan The Man's picture

Exactly...the game is to have a constant flow of reasons why prices are rising in any sector

Mon, 04/04/2011 - 13:15 | Link to Comment Jim in MN
Jim in MN's picture

Minneapolis, Kansas City and Dallas Fed to San Francisco Fed:

Fuck Off.

Mon, 04/04/2011 - 14:26 | Link to Comment Cash_is_Trash
Cash_is_Trash's picture

Our analysis does not provide evidence that Federal Reserve large-scale asset purchases fueled the rise in commodity prices.

Who listens to this crap?

Mon, 04/04/2011 - 13:16 | Link to Comment the not so migh...
the not so mighty maximiza's picture

Do we win a prize at 200?

Mon, 04/04/2011 - 13:16 | Link to Comment alexwest
alexwest's picture

when i read fed is not responsible for oil price hike
my blood is boiling...

heres hard core facts..
oil imports are 10 year LOW.. yes in 2010 US , biggest energy user, imported same amount of barells as in 2000..
period..

WHAT WAS THE FUCKING PRICE OF OIL IN 2000? thats right..

oil must be less 40$, but what was the US debt in 2000 and now.. ? thats is $$$$$$$ delution..

alx

Mon, 04/04/2011 - 13:21 | Link to Comment docj
docj's picture

WTI up to about $108, too.  This could get interesting in a hurry.

Mon, 04/04/2011 - 13:34 | Link to Comment EscapeKey
EscapeKey's picture

And two important things about that;

1. $108, despite Oklahoma storage being pretty much full.

2. That's just as the oil industry starts taking off refinery capacity, to adjust for summer blends rather than winter.

This could get really ugly very soon.

Mon, 04/04/2011 - 13:46 | Link to Comment Jim in MN
Jim in MN's picture

And the extra profit for Koch Industries.....mmmm.....yummy

Mon, 04/04/2011 - 15:12 | Link to Comment trav7777
trav7777's picture

as has been explained, Cushing is largely irrelevant these days (WTI)

Mon, 04/04/2011 - 15:22 | Link to Comment EscapeKey
EscapeKey's picture

In terms of delivery, yes, in terms of setting the benchmark crude price to which MSM refers, no.

Mon, 04/04/2011 - 13:22 | Link to Comment firstdivision
firstdivision's picture

REJOICE!! For the jobs problem is solved thanks to QE http://money.cnn.com/2011/04/04/news/companies/mcdonalds_jobs/?section=money_latest

 

Mon, 04/04/2011 - 13:24 | Link to Comment Alert
Alert's picture

More bonus for oil Exec! 

Mon, 04/04/2011 - 13:26 | Link to Comment tallen
tallen's picture

What ever happened to oil up, stocks down.

POMO should start buying stocks too. Why not just go full retard and buy everything.

Mon, 04/04/2011 - 13:29 | Link to Comment 10kby2k
10kby2k's picture

I have plenty of shit i can sell them ...... they round upwards to the nearest million when buying, correct?

Mon, 04/04/2011 - 13:52 | Link to Comment disabledvet
disabledvet's picture

tis true, "i do note one difference between the Real GD" and this variant.  We shall call it "the lack of full retard" then!

Mon, 04/04/2011 - 13:30 | Link to Comment evolutionx
evolutionx's picture

Japan wind change: atomic cloud is now blowing twoards tokio an all south Japan!

http://www.mmnews.de/index.php/component/content/article/46/7597-atomwol...

Mon, 04/04/2011 - 14:19 | Link to Comment tmosley
tmosley's picture

Damn, looks like I might have been too conservative in thinking the southern islands would escape the plume.  This is likely to happen multiple times over the course of this disaster.  The south of Japan might just take it worse than anywhere else except for the areas right next to Fukushima.  Tokyo certainly doesn't look good.

Japan is well and truly fucked.

Mon, 04/04/2011 - 13:30 | Link to Comment Mr Anderson
Mr Anderson's picture

Why doesn't OPEC come out and just say it.  Every time you print and the dollar index goes down. The price of Oil will go up to make up for lost purchasing power in our own currencies.

Mon, 04/04/2011 - 13:54 | Link to Comment disabledvet
disabledvet's picture

becuz "that trade is failing again."  I sense "rage."  How 'bout you all?

Mon, 04/04/2011 - 15:12 | Link to Comment Mr Anderson
Mr Anderson's picture

I meant "their own"

Mon, 04/04/2011 - 13:31 | Link to Comment lunaticfringe
lunaticfringe's picture

The FED has vast experience dealing with oil markets according to Timmay.

I want oil at 150-200. I would love 8 buck a gallon gas. Thank President Obama and the FED. Oil is priced in worthless dollars. Dollar goes down and oil, silver, gold go up. The trade has absolutely nothing to do with demand.

Mon, 04/04/2011 - 13:32 | Link to Comment slaughterer
slaughterer's picture

But... but... I thought the CIA-armed and -trained Libyan rebels werre going to sell us a few barrels?

Mon, 04/04/2011 - 13:37 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Yes, but they want to be paid in gold and silver.

Mon, 04/04/2011 - 14:02 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

There is plenty of gold, you just have to pay the price.

fofoa.blogspot.com

Mon, 04/04/2011 - 14:22 | Link to Comment tmosley
tmosley's picture

I don't know what the guy in the first link is talking about.  Gold production has been declining for ten years.  He's just pulling things out of Christian's ass.

Mon, 04/04/2011 - 15:19 | Link to Comment trav7777
trav7777's picture

the last year may have made a new peak in production.  Need to see this year's data to know whether it was an aberration

Mon, 04/04/2011 - 17:48 | Link to Comment tmosley
tmosley's picture

I can't find a link to that effect.  Do you have a source?

Mon, 04/04/2011 - 13:31 | Link to Comment 10kby2k
10kby2k's picture

 

Umemployment was printed at 8.8% last Friday......or was that the homeless rate?

Mon, 04/04/2011 - 13:32 | Link to Comment Zardinuk
Zardinuk's picture

I don't buy into the line that this was caused by speculators. Speculators aren't stupid, well sometimes they are but not in a commodities market this big. This is definitely a surge in demand causing this, could be exacerbated by the cash infusions of one form or another and the recent events causing a disruption to production.

Consider this...

The price of oil is just going up and up, so to the "drill baby drill" crowd (which I will readily admit I've jumped on board with in the past), what are the long term consequences of drilling now?

30 years from now, where will we be given these two choices:

1) Drill now, drill hard and fast and get that oil quick.

2) Don't drill, keep buying at high prices from the oil exporting countries.

Answer:

1) In 30 years we will have pulled out a significant quantity of our reserves, which are in the ground (off the coast, whatever), and prices will be higher than ever!

2) In 30 years we will NOT have pulled out most of our reserves, and prices will be higher than ever!

Just thought I'd make the distinction more clear for y'all. Which is the best choice? I am not sure, because in 30 years oil may be easier to produce synthetically because other sources of energy became much cheaper (thin-film solar, thorium fuel cycle, table-top fusion????)

Personally, I think $5/gallon is a pretty good price, I might reconsider my position on drilling with time, if the price were to surpass $10/gallon, that might tip me the other way. We're one of the few countries that definitely CAN afford to import oil at these prices.

Mon, 04/04/2011 - 14:05 | Link to Comment r101958
r101958's picture

In 30 years we will be at 50 m/b of conventional oil production per day. Now consider what that will mean for 'growth' prospects.

Mon, 04/04/2011 - 17:40 | Link to Comment Zardinuk
Zardinuk's picture

Not sure what it will mean for growth, could you explain? Who is going to keep the profits of these oil sales? It's a national resource that "we" would be selling off. I look at it sortof like a strategic reserve.

Mon, 04/04/2011 - 14:20 | Link to Comment css1971
css1971's picture

2) In 30 years we will NOT have pulled out most of our reserves, and prices will be higher than ever!

Now... Take that thought, and apply it to Saudi Arabia. Knowing production is going to fall, no matter how much you drill... Do you think they're going to pump it all out now?

We're going to hit the hoarding stage of the oil depletion saga. It's all been discussed @theoildrum over the last few years if you're interested.

 

Mon, 04/04/2011 - 17:33 | Link to Comment Zardinuk
Zardinuk's picture

They can't shut off production, but they do have a lot more oil for the size of their country so it makes sense to buy from them. We do drill oil also but we're not going to suck this region dry if we don't have to, or build risky/complicated deep-water wells. Like I said we're one of the few countries that can afford to import.

 

Mon, 04/04/2011 - 13:37 | Link to Comment Bubbles the cat (not verified)
Mon, 04/04/2011 - 16:03 | Link to Comment Flakmeister
Flakmeister's picture

  Tapis is extremely high grade oil.... always at a premium for Asian refiners..

Mon, 04/04/2011 - 13:39 | Link to Comment pauldia
Mon, 04/04/2011 - 13:43 | Link to Comment pauldia
pauldia's picture

duplicate, sorry

Mon, 04/04/2011 - 13:42 | Link to Comment pauldia
pauldia's picture

duplicate

Mon, 04/04/2011 - 13:43 | Link to Comment Freebird
Freebird's picture

Oils well that ends well.

Mon, 04/04/2011 - 13:44 | Link to Comment slaughterer
slaughterer's picture

Since ALL assets are correlated, it is time for Benron to crash the equities markets to suppress gasoline prices. 

Mon, 04/04/2011 - 15:47 | Link to Comment A Man without Q...
A Man without Qualities's picture

All assets except housing, which must piss the Fed off no end...

Mon, 04/04/2011 - 13:44 | Link to Comment PulauHantu29
PulauHantu29's picture

Higher commodity prices are due to robust growth, right?

LMAO.

Mon, 04/04/2011 - 13:47 | Link to Comment tallen
tallen's picture

Yeah, turn the Ministry of Truth up LOUDER. CNBC to the masses!

Mon, 04/04/2011 - 13:58 | Link to Comment disabledvet
disabledvet's picture

now i understand LMAO.  I'm such a rookie.

Mon, 04/04/2011 - 13:57 | Link to Comment AldoHux_IV
AldoHux_IV's picture

Jim Paulsen from wells capital said on bloomberg that this bodes well for a manufacturing renaissance-- yep a worthless currency is good for America and the blue collar worker who will get squeezed even more by higher inflation and will have to become no better than a slave in the new manufacturing renaissance since he will essentially be working for food and whatever lodgings his master/ceo will allow him to have.

Mon, 04/04/2011 - 14:25 | Link to Comment whisperin
whisperin's picture

What I'm looking for is several trains with 100 tank cars each heading into Cushing bound for the west coast and then onto VLCC's to Japan. 30% (?) of their electric supply is kaput. That means a patchwork of diesel generators galore to supply power for industrial use. The question is what is the BOE/day required to sustain some semblance of continuity of industrial production? Kan should have used the 3/4 trillion $ buying all the oil available at Cushing instead of the Topix. 

Mon, 04/04/2011 - 15:44 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

Japan's refineries were smashed.  They can't use Cushing crude because they can't refine it.  It is gasoline that will ship there, not crude.  Expect gasoline prices in Calif to go much higher.

Mon, 04/04/2011 - 14:32 | Link to Comment jmc8888
jmc8888's picture

This just in, Marlboro says smoking cigarettes isn't addictive and won't kill.

oh yeah, and...

It's "inelasticity of you're damned"

Mon, 04/04/2011 - 14:35 | Link to Comment dcb
dcb's picture

you know it is real funny watching the fed deny all the stuff those whon predicted QE would bring. sort of like those who predicted the lending fraud would lead to problems, but the fed would say it would be contained. I watched the bernanke say the dollr had bottomed for this year a while back in front of cobngress, wasn't true. These bastared.

 

Also isn't yellin part of SF fed, as dove as you can get. But look, what get said and the truth are always far apart. it allows them to just keep up the same polices. end the fed!!!

Mon, 04/04/2011 - 14:57 | Link to Comment ForWhomTheTollBuilds
ForWhomTheTollBuilds's picture

I'm in the middle of "When Money Dies" right now.  Most monetary authorities in Germany denied seeing any connection with running the printing press and rising prices throughout the entire Weimar hyperinflation.  Most agreed that the rate of printing was actually far behing the rate of price increases (which was how they knew inflation wasnt their fault). One official went as far as saying that they would stop printing money as soon as prices stopped rising.

 

The best incident occured when they increased the amount of currency by about 25% in one day and explained that it wasnt inflationary because the fall harvest was about to come in and so money was only increasing at a rate equal to economic productivity.  Once people had purchased their food from the farmers with their new money, the money would mostly disappear from the economy anyway (they said).

 

You are dealing with people who will NEVER admit its them, always has been them and only ever could be them.  This lie, and the inability of most people to grasp it is what they have.  There will be a collapse, but not before they have taken EVERYTHING.

 

 

Mon, 04/04/2011 - 16:11 | Link to Comment Bruce Krasting
Bruce Krasting's picture

I think the Saudis were referring to WTI. Not Brent. That being the case I would expect another 15 bucks on the Brent print before we hear from OPEC

Mon, 04/04/2011 - 17:22 | Link to Comment FunkyOldGeezer
FunkyOldGeezer's picture

Don't feel too sorry for us in Europe. A great number of us drive Diesel cars that average 45-65 miles per $10.30 (in the UK) gallon. Add into the equation that an imperial gallon is somewhat larger than the US gallon and we ain't so far off paying what the Americans do, to move their butts across town and country. Just a thought.

Mon, 04/04/2011 - 17:31 | Link to Comment Flakmeister
Flakmeister's picture

This is fact lost on a lot of people. I have lived on both sides of the Atl...

Nothing like a turbo-diesel on the French Autoroute, getting 58 mpg while cruising at 140 km/h....

Mon, 04/04/2011 - 18:47 | Link to Comment Chuck Walla
Chuck Walla's picture

They were just joshing. OPEC has about as much extra oil as JPM has excess silver. Good bye great commuter cities, so long LA, Sayonara Suckers!

Sat, 04/09/2011 - 22:13 | Link to Comment thames222
thames222's picture

OPEC is a joke, no matter what they say, nothing can hide the fact that we're running out sooner than we can find more. Peak oil people, not a myth.

 

www.forecastfortomorrow.com

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