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The Oil and gas bubble
American Thinker ^ | 8-18-08 | Thomas Lifson

Posted on 08/18/2008 9:56:58 AM PDT by Renfield

Jack Risko of Dinocrat.com charts oil and gas prices, showing a pattern that looks very much like a speculative bubble.

Notice in particular the freefall of natural gas prices (the red line), suggesting that oil prices may fall even further. Jack speculates that one motive for the Soviet invasion of Georgia is to threaten the major pipeline supplying Europe, thereby helping to sustain oil prices.

A major fall of oil prices to pre-run-up levels would severely cut the income of Russia, not mention the oil states of the Gulf and Hugo Chavez.


TOPICS: Business/Economy; Foreign Affairs; News/Current Events
KEYWORDS: bubble; energy; energyprices; gas; geopolitics; oil; russia
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1 posted on 08/18/2008 9:56:59 AM PDT by Renfield
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To: Renfield

Who are we going to have bail out when this one bursts?


2 posted on 08/18/2008 10:00:29 AM PDT by Wolfie
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To: Renfield

Well we don’t want to pop the bubble too soon. It would be nice to get some more production at home first so we can help avoid future bubbles.


3 posted on 08/18/2008 10:01:45 AM PDT by for-q-clinton (If at first you don't succeed keep on sucking until you do succeed)
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To: Renfield

If natural gas is in freefall, how come my cost is going up from $9.4/MCF to $15.5/MCF this year?!

I’ll be able to manage this, but this will seriously hurt many families in the north that use natural gas heating. If it’s a cold October, it will hurt McCain, (gas bills before the election). A cold November/December will mean a very lean Christmas for the retailers.


4 posted on 08/18/2008 10:02:11 AM PDT by brownsfan (Algore makes P.T. Barnum look like a piker.)
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To: Renfield

I cut my consumption by 75% (without any decreased travel) in 2005 when gas went over $2. Good to see the price direction finallly responding.


5 posted on 08/18/2008 10:02:41 AM PDT by Paladin2 (Huma for co-president! (it ain't over 'til it's over))
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To: Renfield

Makes you wonder how many of those speculators had Russian sounding names.


6 posted on 08/18/2008 10:02:59 AM PDT by downtownconservative (Intelligence sans reason is vainglorious pulp)
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To: Renfield; SAJ; thackney
The idea seems to ignore that Natural Gas is used in the manufacture of fertilizer (It's the off season, for fertilizer and home heating), and that new plays such as the Barnett Shale and the Marcellus Shale are primarily gas plays, without so much oil involved.

Maybe SAJ and thackney have some input here as well...

7 posted on 08/18/2008 10:05:52 AM PDT by Smokin' Joe (How often God must weep at humans' folly.)
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To: Renfield
NYTimes:

Oil Prices Fall. Women and Minorities Hurt the Most

Experts Blame Cruel, Heartless Republicans

(AP) | 11-05-08 | Jeff Chandler

Higher taxes are the cure for the present crisis, according to....

8 posted on 08/18/2008 10:07:06 AM PDT by Jeff Chandler (My friends, I am voting against Obama because he is white.)
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To: Wolfie
Who are we going to have bail out when this one bursts?

The same people you bailed out when the last two oil 'booms' went 'bust'.

No one.

9 posted on 08/18/2008 10:07:16 AM PDT by Smokin' Joe (How often God must weep at humans' folly.)
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To: Renfield

Oil is at 113.45 right now, down 32 cents.


10 posted on 08/18/2008 10:08:17 AM PDT by Signalman
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What’s so wild about all of this is that the Russian incursion hasn’t done anything to the oil market, apparently. A couple of months ago, it would have sent oil up $10 a barrel in one day. Strange thing, the market..


11 posted on 08/18/2008 10:12:50 AM PDT by Arkansas Toothpick
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To: Renfield
You would think that tensions in the caucuses would push the price of oil up just like tensions in the gulf. But it doesn't seem to work that way. Is everyone dull from watching tv or is there something else at play.
12 posted on 08/18/2008 10:13:58 AM PDT by ckilmer (Phi)
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To: Renfield

I’m glad to see that everyone is keeping their tires inflated

;)


13 posted on 08/18/2008 10:22:05 AM PDT by kidd
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To: kidd

It’s all because millions of Americans suddenly learned to keep tires properly inflated..... /s


14 posted on 08/18/2008 10:24:26 AM PDT by Enchante (Obama-cons: Trying to fool America, one media dupe at a time!)
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To: Enchante
This is nothing!

Once the Obama federal Mandatory roadside tire inflation inspection stations (manned by 75,000 newly deputized gov't employees goes into effect, the price of a barrel of oil should drop to about $10.00. Additionally, the fines imposed (only on the wealthy) for under inflated tires should balance the budget. <

In Obamanomics its a win - win situation!

15 posted on 08/18/2008 10:35:14 AM PDT by CharacterCounts (When you discover rats in your house, you only have two options - fumigate or tolerate.)
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To: ckilmer; jsh3180

The price of oil has been depressed because of a dollar rally that began on August the 4th - and was started by the Russians.

I paraphrase FReeper jsh3180 on this subject:

“On that date huge sums of money was moved into short term US Treasury Bonds. The money for the bond purchases - about $50 Billion - was funneled through Swiss and Eastern European institutions.”

“This money would appear to have come from persons that knew in advance of the Russian invasion of Georgia. As the tanks rolled in, the Ruble and the Russian stock markets crashed.”

“All the Russian money pouring into the US$ set off a buying/short covering panic. Institutional/hedge fund black box trading algorithms are programmed to do the following when the dollar moves up: sell Oil, sell Gold and Commodities, Buy US equities.”

“The mass movement of Russian money into the $, combined with program trading is THE reason that gold and oil sold off on the news of the Russian invasion, a geopolitical event that normally would have had the opposite effect on oil and gold.”

So it would appear that the Georgian war has allowed rich Russians to get richer at the expense of their countrymen.

Also - if the Russian cognoscenti were buying bonds and divesting the ruble on August the 4th, then it’s pretty clear that they knew war was going to break out on the 8th. No more of this “The Georgians started it” nonsense


16 posted on 08/18/2008 10:36:29 AM PDT by agere_contra ("We are all Georgians" - John McCain)
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To: agere_contra

I wonder if they are messing with Soro’s..or working with him.


17 posted on 08/18/2008 10:55:01 AM PDT by Dead Dog
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To: Renfield

I still think the Russians are giving Republicans the biggest gift of all via slowing the rate of the freefall of oil prices and lending credibility to the notion that we need to drill for our own oil.


18 posted on 08/18/2008 11:21:15 AM PDT by TheThinker (Capitalism is the natural result of a democratic government.)
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To: brownsfan
“If natural gas is in freefall, how come my cost is going up from $9.4/MCF to $15.5/MCF this year?!”

The price you are paying now is due to that particular gas already being contracted for at a certain price months ago. There is always a lag between price changes in energy and the reflection of same in your energy bills. Energy providers speculate to take volatility down. If they did not do this, prices would flucuate faster, leading to worse problems.

19 posted on 08/18/2008 12:01:55 PM PDT by SaxxonWoods (If you don't vote, you don't matter.)
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To: Smokin' Joe
(It's the off season, for fertilizer and home heating)

but very much on season for Electrical Power generation and Natural Gas storage.

I believe that provides some balance to the season

20 posted on 08/18/2008 12:50:04 PM PDT by thackney (life is fragile, handle with prayer)
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