Thursday August 30, 2007

Gasoline supplies at lowest ever

thestar.com :

United States gasoline supplies stand at the lowest point ever recorded when measured in terms of demand, at just 20 days of average fuel consumption, the Energy Information Administration says. "This is even fewer days than seen following the hurricanes in 2005," the agency said yesterday [29 Aug 2007] in a weekly review of the oil market.

With word of a sharp drop in U.S. crude stocks as well, light, sweet crude jumped $1.78 (U.S.) a barrel to $73.51 on the New York Mercantile Exchange. Some analysts have forecast global supply will continue struggling to keep pace with demand unless the Organization of the Petroleum Exporting Countries ramps up oil production. OPEC officials have steadfastly said supplies are ample and have blamed refinery problems for fuel tightness.

- On a fine, calm day with no head-line grabbing hurricanes, strikes or refinery fires, and with good news on the geopolitical front with the South Korean hostages being released, oil goes and jumps up to over $73.

And they blame this on inventory levels. Hmm. This reminds me of the headlines on 57 days of global grain inventory.

See also :

1. World grain stocks fall to 57 days of consumption

(2007-08-30 17:18:54 SGT) [Energy] Permalink

Wednesday August 29, 2007

$70 : OPEC target price

news.yahoo.com :

The head of the International Energy Agency (IEA) criticised OPEC for setting a target price of around 70 dollars per barrel, saying in an interview published Tuesday [28 Aug 2007] that it would hit the poorest hardest. "The market is clearly aware that OPEC has set itself a new implicit price target or a new price band of around 70 dollars (51 euros) per barrel and that the organisation will endeavour to defend this level," Claude Mandil told Arab Oil and Gas review.

"I deplore this, because it is a factor that could, whatever people often say, weigh on world economic growth and which represents a very heavy burden for the poorest people and the poorest countries," he added.

- Demand destruction, anyone?

See also :

1. Canaries in the coal mine

(2007-08-29 15:00:42 SGT) [Energy] Permalink

If you receive this email ...

I received this email :

"If you receive this email, your mail server settings are correct."

Hmm. But what if I didn't receive this email? Comic relief on a dreary day. This almost ranks up there with the classic :

"If you notice this notice,
then you'll notice that
this notice is not worth noticing."

(2007-08-29 14:23:30 SGT) [Musings] Permalink

Friday August 24, 2007

Lowem the market indicator

Just like Biow crashed the market not long after she bought her first shares, it looks like it's my turn to be a "market indicator".

I go on holiday to Genting and on the first day of the trip, the night of 16 Aug 2007, what happens? Stock markets practically everywhere collapse and the Fed had to come to the rescue. I go on MC on 22 Aug 2007, and what happens? The Cat A COE price drops by over 50%.

Hmm. What shall I do for an encore? Let's see. If I'll blow some money and take a trip to say, Europe, when I come back, I should expect that the world financial system has blown up, the Second Great Depression has started, and the major world powers are gearing up for World War 3.

Just kidding. Maybe.

(2007-08-24 10:57:26 SGT) [Biz] Permalink Comments [1]

Monday August 13, 2007

Fun and interesting times

You might know what they say about the famous ancient Chinese curse : "may you live in interesting times". The saying may be famous but it is in fact neither ancient nor is it Chinese, but the times, they are quite interesting, aren't they? Perhaps even fun. But I guess it all depends on your definition of fun.

Subprime loan problems? Hedge fund collapses? Credit crunch? Trillion-dollar stock market wipe-outs? Hundred-billion-dollar "liquidity injections"? Fun. Quite fun. I hear that people are calling up their brokers and yelling stuff like : "Sell everything. Get me out of all my positions". For the slightly (*cough*) more volatile stocks that I follow, this can result in, for example, charts that look like this :

The company has got properties in gold and oil and gas and uranium and has an oil services division that's actually bringing in regular cash flow. Did all that suddenly go away? I guess not. So there I was :

That's the intra-day chart, and that's me, together with some other buddies I do not know, buying in at $0.65 on a fine Friday afternoon (over that side). Shrug, it was on sale at 50% off - if you consider the recent prices in the first chart, where *somebody* was doing trades at $1.30 just less than a month ago.

Okay, so this is my definition of fun : selling when people are buying, and buying when people are selling. What do you think, *somebody* had to be on the other side of the trade, right? For folks like us, as legendary contrarian Doug Casey puts it :

"... when people are desperate to sell their possessions, he appears with cash - the very thing they want most. When they change their minds and clamour to buy those things back from him during good times, he once again graciously accedes to the desires of the majority ... if he wasn't there to buy, perhaps no one would be, and sellers would be really in trouble."

Well. Most people, including many who say they swear by technical analysis (TA), would be terrified. It's a complete breakdown, they might say. It's crossed below the moving average. It's gapped down. It's a double top. The internal indicators are bearish.

Yes, I know all that. And I went in to buy. It's all part of the fun to me, and you want to know why? Because I know one thing. The ounces of gold, the barrels of oil, the pounds of uranium in the ground, that these companies own, are exploring, or drilling for - these resources do not increase their supply at 10%, 20% a year. Literally, what you drill is what you get. But the money supply that underwrites our entire economic system, can, and does, grow at 10%, 20% per year. U.S. M3 is growing at 12, 13% per year. Singapore overtakes that, with 22, 23%. China is at 20-odd%. I hear that Russia is chugging along at 50%. I don't know about Zimbabwe, last I heard their *price inflation* was doing 5000% so their monetary inflation figure is probably even higher than that.

Limited physical resources, meet unlimited money supply.

It's going to be a grand collision. It's going to be fun.

(2007-08-13 12:54:45 SGT) [Biz] Permalink

Monday August 06, 2007

US dollar index falls below 80

news.yahoo.com :

Fears of a global credit squeeze and worries about U.S. economic strength swept across financial markets on Monday [6 Aug 2007], shaking up stocks, knocking the dollar to a 15-year low and straining popular currency trades.

Risk aversion, meanwhile, threatened the "carry" trade in which investors have borrowed in low-yielding currencies such as the yen to invest in assets in higher-yielding ones. The yen rose. The dollar was down a third of a percent at 117.66 yen. High-yielders such as the New Zealand and Australian dollars were weakening against the yen.

The dollar fell to a 15-year low against a basket of currencies, as speculation about the credit market and softening U.S. data prompted thoughts of a U.S. interest rate cut. The dollar index fell below the psychologically key 80.0 level, while the euro rose to within sight of its record high above $1.3850 struck two weeks ago.

- Something that a lot of people have been watching for : the USDX falling below 80, crashing through a multi-year support level from which it had repeatedly bounced off earlier. But apparently not this time. Watch out below !!!

(2007-08-06 17:09:58 SGT) [Biz] Permalink

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