Monday, 12 January 2015

Somebody accurately called the oil bear market...

I'm not trying to brag or anything here, but I called it. And it just goes to show for the fundamentalists among us, that we might have to wait a little longer then we want to, but nothing trumps the fundamentals. How many chart technicians like Dan Norcini called the oil bear market ? I didn't hear a word out of them.

This was a comment I made on the FOFOA blog on June 6 2014 when oil was $102 a barrel:

I cant help but notice that everyone from Brazil to Russia to Canada to the US thinks that the oil market is immune to over supply. If you watch "The Prize", you will see that there was always an obvious business cycle in the oil market. When prices were up, oil companies would bring more supply to market and new oil companies would sprout up. Then, the market would become over-supplied and prices would would fall.
Everywhere you look, there is countries and companies discovering new oil and using capital intensive means to get at it. Everyone is becoming oil rich. Russia turned itself back into an empire overnight because of oil.
Everyone seems oblivious to the fact that oil is a commodity market like anything else and if it gets over-supplied, the price will have to come down. It always does. But ever since 2000, there hasn't been a state of over-supply in the market. I think we are way overdue for one. Who knows what form this oil bear market will take, with all the inflation in the world....Who knows how badly the inflation is screwing up the oil market.

5 comments:

  1. M, you still alive?

    I think the FOFOA site has died. No fun allowed. Everybody chased away.

    Jeez, it was just a radio show, people.

    ReplyDelete
  2. http://s3.postimg.org/6sa7w9kdf/arrows.jpg

    May 11th is here, the second arrow, and what happens?

    Greece is asked to be part of the BRICS Bank.

    ReplyDelete
  3. http://stealthflation.org/2015/05/25/china-creates-gold-investment-fund-for-central-banks/

    There's a much smarter way of handling gold mining. Rather than exorbitantly tax mining, take an equity position and pay yourself in gold dividends. It's a win-win for everybody.

    ReplyDelete
  4. The market continues to be sluggish as the Nifty is below 8650.The 50-share index is down 3.95 points at 8638.60.
    CapitalStars

    ReplyDelete
  5. Gold dipped in Asia on Wednesday with the focus on remarks by the Fed chief at the end of the week to see if recent hawkish views by colleagues on the need to hike interest rates soon are repeated and expanded. capitalstars

    ReplyDelete