Crude futures rise

[mom cat]

Crude Futures Rise
The Associated Press
Published: Jun 24, 2004






NEW YORK (Dow Jones/AP) - Crude oil futures rose in New York Thursday as an escalation in a strike by Norwegian oil workers threatened to shut down the country's oil output.
Responding to plans by striking oil workers to expand their strike starting Sunday, the Norwegian Oil Industry Association announced Thursday that it would lock out the oil workers beginning Monday.

The strike has already disrupted about 400,000 barrels a day in oil production in Norway, the world's third-largest oil exporter. A lockout would bring the rest of Norway's output of about 3 million barrels a day of oil to a halt.

But while the Norwegian government is widely expected to step in to avert a lockout, oil traders on both sides of the Atlantic hedged their bets in case a lockout does occur, said James Steel, director of research at brokerage Refco LLC in New York.

"The threat to lock out the workers on Monday certainly made an impression on the market partly because we haven't seen the government intervene (yet)," Steel said.

http://ap.tbo.com/ap/breaking/MGBJ8WUE

[mhr]

1. Price Volatility Associated With "Tight" Commodities Market

In a Nutshell - Peak Oil Is Already Having an Impact!

Read more here: www.dallasforkerry.com/mediascope/brainzone/

[puerco-bellies]

2. Crude traded in a range of about 35 cents today.

Myself and many of my fellow brokers think that the market has a whole are ignoring the reality of Saudi instability, the shutdown of Iraqi production, with the Norwegian strike as an very minor blip. I am long on crude contracts and my colleagues are for the most part bullish on September through December crude long positions. My best guess is a overnight increase to 42 to 48 dollar a barrel if ANY physical oil assets are attacked in the Saudi fields.

[mhr]

3. Micro-Economic Theory On Market Behavior

suggest that as a commodity becomes scarce near some peak in availability price will become more unpredictable.

Narrow trading range today, maybe, just wait though as we move ever closer to the production peak. Any little thing that disrupts supply will ripple through the market since all the supply slack will be gone.

Past peak, the pricing mechanism will become more stable again as the slow supply erosion will be predictable.

I wonder how far out one can buy oil futures. I'd place a bet on crude five years out.

[cliss]

5. That's.......very high, PB.

When we are talking about oil being $42 to $48 per barrel, we are talking about many companies shutting down.

Stan Goff said that when oil hits $50 per barrel, our economy comes to a standstill. This is a very knowledgeable guy, and he must have his reasons for saying that.

Also, consider how likely it is that we'll see more attacks on the Saudi oilfields. Terrorists know where the jugular is. Once they locate and cut off our blood supply, we're finished. Scary.

[daleo]

4. Crude futures indeed

n/t