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Friday was
reminiscent of "bottom finding" action....the late day rally was pretty
impressive. There are some long bets going off at these low prices in the hopes
of a near-term crude oil decline.
<FONT color=#0000ff
size=2>
I have found
statements blaming the price of oil on speculators and hedge funds somewhat
humorous as that indicates the futures markets can OVERRIDE basic supply and
demand economics. If that's the case, "we're no longer in Kansas, Dorothy" (a
free market economy).
If in fact the
Saudi's are really shipping out more oil, spot crude should decline and
"take-down" the futures contract prices with it. <SPAN
class=255294122-15082004>I don't think that's the
case.
My feeling is
that OPEC is net long on oil futures when they should instead be hedged with a
short position.
If this is true,
these sky-high prices could unravel quickly if they need to cover
and reverse to short.
<BLOCKQUOTE dir=ltr
>
<FONT face=Tahoma
size=2>-----Original Message-----From: Bob
[mailto:BHEISLER@xxxxxxxxx]Sent: Saturday, August 14, 2004 10:14
AMTo: realtraders@xxxxxxxxxxxxxxxSubject: Re: [RT]
Oil
I agree on 1060 and also noticed the reaction
between the trade deficit and bond yields. And again, this may be just a
pause before the bottom falls out but it's always interesting when a market
holds up in the face of such news.
Yes, oil is oil, but there has been, to this
point, an obvious negative correlation between the stock market and oil.
And it wasn't a talking head from CNBC I was referring to but a fellow trader
making observations about something I am not familiar with......hence my
post.
<BLOCKQUOTE
>
----- Original Message -----
<DIV
>From:
EarlA
To: <A
title=realtraders@xxxxxxxxxxxxxxx
href="">realtraders@xxxxxxxxxxxxxxx
Sent: Saturday, August 14, 2004 8:17
AM
Subject: Re: [RT] Oil
While the 1065+- area has held support, I find it noteworthy that
equities have barely gotten a bid for the entire decline. Failure to get a
strong bid at current support suggests to me that the decline is probably
not over.
The biggest anomaly in Friday's action was fact that trade deficit
soared yet bond yields declined. The underlying trends in the deficit
suggested smaller currency inflows to US. Overall, it would seem that
increased credit demand to finance the trade deficit and decreased inflows
would lead to higher bond yields.
Oil is oil and I think few (especially not on CNBC) know where oil is
going. For now it is in an up-trend, OPEC candidly admitted (then retracted)
that they had little/no excess capacity remaining and the global economies,
especially Asia, have yet to show significant signs of slowing which
suggests continued high demand. Of particular interest is the fact that the
Oil/Gas ratio has gotten so far away from it's usual 6:1 range.
Earl
<BLOCKQUOTE
>
----- Original Message -----
<DIV
>From:
Bob
To: <A
title=realtraders@xxxxxxxxxxxxxxx
href="">realtraders
Sent: Saturday, August 14, 2004 5:06
AM
Subject: [RT] Oil
Was anyone else surprised at how the
indexes held up this week in the face of Oil continuing its relentless
rise and some not so inspiring earnings reports?
Maybe it's just a pause before the indexes head lower but I thought
it was rather odd.
I also heard a trader on CNBC state that he
believes oil is within a week or so of a top, and the reason he cited was
the current relationship/spread between the front month and outlying
months. This is beyond my area of expertise so I was hoping some
others would share their
views.
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