preface:

Long time poster,don't believe in chemtrails,saw two side potential for Y2K outcome,because of info. thought it would be much worse,still mystified by outcome,seen all the predictions come and go etc.

Now on to this oil thingy. I was an oil jobber for eight years in the eighties. I recognized at that time our entire civilization literally baths in oil.Back then (before the new paradigm) it seemed that oil prices were the biggest barometer for inflation. If oil prices went up--inflation went up--simple as that!This Due to the fact that ALL sectors of society use oil to an incredible degree. Shipping,transportation,manufacturing,gov.power,etc.

Last year at this time oil was unbelievably priced around$10.00bbl. To have the price of a barrel almost triple in price without any wars,shortages,cold weather,hurricanes or other force majeueres (sp) is simply beyond me. I don't give posters like J.C. much credibility especially after what we all just came thru, but if anyone thinks $28.00 a barrel oil is no big deal, I beg to differ.

Somethings up!!

-- d............ (dciinc@aol.com), January 17, 2000

Answers

I know almost nothing about oil and its effect on our economy.. but I would be interested to see a chart about when the price started going up... did it happen after Y2K?

Noswad

-- Noswad (dontknow@squat.com), January 17, 2000.

Re oil charts, there are a some here (monthly; daily):

http://oilworld.com/1cashpet.h tm

-- It's Me (Not@here.com), January 17, 2000.

"If oil prices went up--inflation went up--simple as that!"

A common mistake among non-practicioners of new paradigm thinking. You see, the government simply removes food and energy costs from its inflation calculations. Then they can claim that consumer prices only rose 0.1% in December 1999. Inflation? Where?

-- Chris Tisone (c_tisone@hotmail.com), January 17, 2000.

I know nothing about oil either. However, something isn't making sense to me. Why on earth would oil be affected with date dependent embedded chips/systems when not much of anything else is affected (for the most part)? The lights are on, natural gas is running to homes, the gas pumps are working, TV stations can broadcast, phones are working ... on and on. These prices must be going up for other reasons. I'm just finding it hard to believe oil production/refining is the only thing on earth that has date dependent embedded systems (again, with a few exceptions).

-- Larry (cobol.programmer@usa.net), January 17, 2000.

Oil rose from 10 dollars per barrel (1999 start) to 23 $pb by year end.
Now so far this year (in the first 15 days) it has risen by 35% of all of last year's rise. This does not bode well. If the track on the chart is made to parallel last year's rise and fall but with this year's offset as a base and gain in accelleration, then the outcome as of Dec of 2000 would place oil at 140 $pB (more or less).

-- pliney the younger (pliney@puget.sound.fog), January 17, 2000.

this means WAR....with somebody.

-- Porky (Porky@in.cellblockD), January 17, 2000.

Just checked out the oil charts in Metastock. I plotted the continuous futures chart since 1983. The prices shown are NOT spot prices, but the nearest futures contract. It's a good indicator of where the spot price will go because as the futures contract expire, its price will equal the spot price (IOW, futures will fall or rise to meet the spot price or vice verse).

Anyway, all that to say this. Prices have been rangebound within $10 and $27 a barrel since 1986. (I am excluding the shot up to $40+ per barrel during the gulf war. This was panic-induced and short-lived and should be thrown out.) Prices touched $10 early 1986 and again late 1998. Prices touched $27 late 1996 and just recently. All other price movements during this time has been "mini-trends" within this upper and lower limits.

Friday's price surge turns the charts VERY interesting. It blew right through this upper limit without a problem. In technical analysis, this is a breakout and CAN be a huge bullish sign for prices. The test will come on Tuesday. If prices contract back under $27 per barrel, one can construe that it was a "false breakout." If prices maintain $27 or better for at least a week, then it is a true bullish signal.

What does all this crap mean? When prices break out of a long term pattern, especially one that lasted 15 years, the resulting move CAN be a BIG one. Applying some technical priciples, I see the next resistance point at $31-$33 per barrel. If it breaks through that, then I see the next resistance level at $42 where the Gulf War panic led prices to. IF and only IF prices can break through $42, God forbid, then my friends we are in previously uncharted territory and the bidding wars will commence. I'm not sure what the economic effects would be besides just knowing it would be negative, but if it stays up there it would make our worst Y2K nightmares come to fruition.

-- I AM (Trying@2B.Reasonable), January 17, 2000.

I AM, Terrific analysis!

-- nothing (better@to.do), January 17, 2000.

--here is my analysis, and I know even less than noswad about this.

US is 100% dependent on cheap oil, all the time

average joe aqnd josephine sixpack could care less about anything else but price of gas and price of beer

if oil and gas prices increase to the point of whizzin off joe and josephine, the fed gov gonna be in a world of hurt

conclusion is that TPTB will do ANYTHING, WHATEVER IT TAKES, to keep oil and gas prices at as near a stable price as they can, and no radical increases-a real real slow gradual increase, maybe, but ZIP real quick price increase. There wouldn't be a politician able to come out of his or her bunker if gas doubled or tripled or quadrippled and stayed there, so I don't think it's gonna happen. Those folks staying in power is priority #1, all over the world, for that matter.

--all with no charts, nets, or elliot waves! hahahahaha!

-- zog (zzoggy@yahoo.com), January 17, 2000.

It's called supply and demand...I can't say it any better. OPEC is NOT cheating! A cartel is only a cartel if it can manage the price. In the history of OPEC they have never before been able to maintain a unified front. They were perfectly willing to maintain status quo as long as they were rich and the money was free and easy. Well, we may have underestimated the importance of maintaining a balance overseas between our own interests and those of the Saudi's. I can assure you that our unwillingness to lend a hand during the price crisis last year will not be forgotten anytime soon.

These are the consequences of failed foreign relations policies. The economy stupid, is a global economy, and one in which we do not control the commodities. US domestic production has been in decline for some time. Our only hopeful area of exploration is the GOM and that is not Nirvana to say the least. Funny how something as strategic as oil managed to fall to such low levels last year and the year before? Do you think that could EVER happen to stocks? Nah.... the stock market is to important, it could never fail. Duh!

IPE front month finished up .48 cts today although some of that was likely due to expiration and rolls (front month expired over the last week and so some traders will roll positions pushing the price up).

http://www.ipe.uk.com/prices.html

-- Gordon (g_gecko_69@hotmail.com), January 17, 2000.

I don't think oil will remain at this level for too much longer. People have a way of finding other alternatives and the oil companies are not interested in you and me finding some other energy source or during onto and relaying on something other than oil.

Anyway in my 30 years of working the world started out fairly stable until the MBAs come onto the seen. Since then we've seen the hight oil prices, the lowest oil prices, the highest wheat prices the lowest wheat prices, the hightest interest rates the lowesst interest rates. The highest value for our dollar the lowest value for our dollar. The highest gold price the lowest gold price, the highest stock prices the lowest stock prices.... and on and on and on...

What a mess!!!!

justthink

-- justthink com (justthink@y2k.com), January 17, 2000.

We are in worse shape today to weather an oil shock than any time since 1973. Look at all of the SUVs and large houses that people have been buying since irrational exuberance took over the stock market. Most of this has been bought on credit. When gas reaches $2.00 at the pump, katy bar the door.

-- Mr. Adequate (mr@adequate.com), January 18, 2000.

For what's its worth.

Technical Analysis: A breakout is not considered valid until the price exceeds the ceiling (high price) by from 3 to 5 percent. Also if you look at a moving average (average let's say 5, 15 days whatever) you take some of the noise out. This also helps from chasing daily price swings and traders that bump the price just over/under big floors/ceilings to get novice investors to jump at moves. It can get pretty esoteric for the math wiz but keep things simple and allow for small fluctuations.

-- Squid (ItsDark@down.here), January 18, 2000.

Squid: Agreed. New traders look at some basic technical principles and jump aboard when certain criteria are met. The pros use the beginners as meat to be devoured and cause short term price fluctuations to run the stops, etc. to their profit.

In the long run, fundamentals are king in this market. If there is a shortage developing, prices WILL go up. The price charts will show the shortage. Like I said, if this is the real thing, then we ought to be concerned. If I had the margin and the balls right now, I would go long crude. I may still buy an option, which is more frugal.

-- I AM (Trying@2B.Reasonable), January 18, 2000.