Over valued oil?

[Andy823]

http://www.forbes.com/2009/05/27/oil-opec-energy-markets-commodities-crude.html

Commodities
Overvalued Oil
Lionel Laurent, 05.27.09, 10:14 AM EDT
We are swimming in black gold, despite the recent rise in prices. Expect a correction soon.

The equity markets effectively spotted an end to the recession at the end of the first quarter, and now the commodity markets are responding in kind. Oil prices are comfortably above $60 per barrel, almost double what they were in January, and Saudi Arabian oil minister Ali al-Naimi is now talking about a price of $75 per barrel in the third or fourth quarter of this year.

But much like in the stock market, oil traders seem to be grasping for potential recovery in the future rather than looking at the reality on the ground. IHS Global Insight analyst Simon Wardell said on Wednesday that oil was currently overvalued, with no demand growth in sight. He noted that inventories tracked by the Organization for Economic Cooperation and Development were at an 11-year high of 2.7 billion barrels.

"The inventories are getting very, very high," said Wardell. "We're producing too much oil, and we're running out of places to put it."

The United States Energy Information Administration said as much earlier this month, when it said that expectations of a price rise in the coming year would "need to be tempered with the current market reality of this supply overhang." The government department slashed its projections for 2009 world oil consumption to 1.8 million barrels per day, from 2.2 million.

Once again the speculators are trying to jack up the price when the markets, supply and demand, do not back up the rise in prices. The Saudis want the price up to at least $75, and speculators would love to see that so they can sell all the oil they have stored up that they bought at far lower prices.

[AndyA]

1. And when in the hell is our Congress going to look into this and DO SOMETHING ABOUT IT?

There's little doubt that last summer's excessive prices for gas and oil contributed greatly to the economic issues. Many consumers were squeezed too much due to the cost of fossil fuels, which busted the budget for many.

We've since learned that speculators in the market are largely responsible for driving up prices.

And now, it would seem, the people who gave us the worldwide economic collapse are at it again.

When is Congress going to do something about this? When gas hits $4.50/gallon again?

[madrchsod]

3. never......

[Andy823]

5. I agree.

Congress is just as guilty, and the problem is that to many in congress, on both sides, are in the pockets of the oil companies, financial investors, and big corporations that want to screw the average american so they can make huge profits, and the members in congress can get money so they can run for election again. We can't wait till prices go up again, we need some action on this now from congress, but I won't be holding my breath till we get it!

[madrchsod]

2. refineries are running at 85% and diesel fuel is cheaper than gasoline

the government will do nothing to investigate oil speculation..could it be they do`t want to take on the banks who speculate in oil futures?

[Andy823]

4. You might be right.

I have read articles that some of the big investment companies bought up oil storage a few years ago, and were storing up all the oil they could. Now the storage is full because these same people are waiting for the price to go sky high again so they can make "another" killing! congress doesn't do anything, and that has to make one think about why they aren't trying to help the people instead of the financial investors and speculators.

Last week gas went up here to $2.79. In one month it went up almost .30 cents a gallon. Diesel is now selling at $2.69 a gallon here. Earlier in the year I read an article saying that diesel would be cheaper than gas this year, and if the greed ethic had not kicked in, both gas and diesel would be even cheaper, for a change!

[Wednesdays]

6. K&R

:kick:

[TheFarseer]

7. by mid-July at the latest

these speculators jacking up the price will take their money and run. Of course who knows how high oil will be at the peak - not $145/barrel though.