“If we adopted European mileage standards our dependence on foreign oil would literally end overnight.”
Even though this would help, it is far from correct if you look at the numbers. European milage standards are about 20% better than ours, at about 39 GPM.
The US uses around 23 million bbl per day. We do not import about 5 million. Also, only 70% of the barrel turns into gasoline.
“The tendency for a rally in Crude starting in Feb is one of the strongest and most consistent seasonal patterns that exists. When you couple that with the real pros the commercials being heavily long, you had about as good a setup for a rally as you are ever going to get”
This happens because the “pros” know that the summer blend switch is going on. That means they shut down refineries to retool their facilities. Hence the pros know that supplies are short and prices will go up.
“If anything, the entry of speculators affects the price of energy price risk. That is, it impacts the “drift” in a futures price to an expected future spot price that is based on expectations regarding supply and demand conditions at contract expiration, rather than affecting the price of physical oil. Put differently, derivatives markets are primarily for buying and selling price risks rather than for buying and selling the commodities themselves. The delivery process ensures that futures prices converge to physical spot prices, but the amount of activity in contracts with payoffs tied to a commodity price need bear no relationship to the amount of the physical commodity available, and if speculators (and others) act competitively, the physical spot price will be driven by supply and demand fundamentals regardless of the magnitude of the “side bets” on commodity price risk.”
RE: Fundamntals-Supply has been flat for 2+ years and is only going down from here, demand has been increasing and will continue to do so. It’s that easy.
The big question is what will happend when we go down the other side of the bell curve of oil productin?
