A Brief Midday Economic Comentary

[onthepequod]

This morning saw the Dow and most of the market down primarily on news that Iraq will be restricting oil exports and profit warnings from IBM.

Based on the Iraq news North Sea Brent crude oil was up approximately 4% this morning. However, smart money is on prices at the pumps rising substantially above 4% with some middle man pocketing the difference.

Overall the market is still off with technology stock mixed and financials (more specifically banks) generally up (go figure ).

[ 04-08-2002, 02:39 PM: Message edited by: onthepequod ]

Funny how a problem in Israel between them and the Palistinians which does not threaten any of the other oil producing countries is cause for a price hike.

Be kind of poetic if the world said "screw" the Middle East, and went with the Russians who also have huge oil reserves. It would also be ironic if this whole middle east flap would spur development of alternate energy sources which in turn would lead to the middle eastern bastiches dropping back into their pre-historic nomadic lifestyle of camel jockey, left in the back wash of humanity with nothing left to offer the modern world.

If Im not mistaken, the only reason any of these countries have any modern conveniences is because they had oil to sell. What do they do if their customers go away? Goat hearding just doesnt allow for much in the way of progress.

[onthepequod]

Originally posted by MagiK: Funny how a problem in Israel between them and the Palistinians which does not threaten any of the other oil producing countries is cause for a price hike. Be kind of poetic if the world said "screw" the Middle East, and went with the Russians who also have huge oil reserves. It would also be ironic if this whole middle east flap would spur development of alternate energy sources which in turn would lead to the middle eastern bastiches dropping back into their pre-historic nomadic lifestyle of camel jockey, left in the back wash of humanity with nothing left to offer the modern world. If Im not mistaken, the only reason any of these countries have any modern conveniences is because they had oil to sell. What do they do if their customers go away? Goat hearding just doesnt allow for much in the way of progress.

Well put MagiK!

At this point OPEC has called an emergency meeting in order to increase production from other cartel contries in order to offset Iraq's decrease in exports. Fortunately, the producing heavyweights, Saudi Arabia and Kuwait, do not support decreasing oil exports and either of them could individually offset Iraq with little difficulty. Make one glad we supported Kuwait in the Gulf War.

Now we'll just have to see if OPEC can come to an agreement. Either way I bet prices at the pump still rise. Those dirty *$#@^$%#.

[*\Conan/*]

Hey O!
I am wondering when GB is going to start breaking into Americas stock pile of crude.
Or at least have it a little more in a ready state in case of emergencys.

Yes and as we all know, price at the pump has nothing to do with supply. Gas that the owners of stations buy at one price gets the price raised before the owner even has to buy at the new price...the whole petroleum distribution system is pretty corrupt...at least in my opinion.

[*\Conan/*]

I have been receiving junk mail asking for money concerning northern territorys besides the wildlife ones that I support. Strange things have been happening there lately also. Did you see that huge chunk of ice snap off into the water a week or 2 ago? Mybe nature itself already knows what is coming

Everthing is great this side btw

[ 04-08-2002, 04:53 PM: Message edited by: *\Conan/* ]

[onthepequod]

Originally posted by *\Conan/*: Hey O! I am wondering when GB is going to start breaking into Americas stock pile of crude. Or at least have it a little more in a ready state in case of emergencys.

Hello Conan! I'm betting that ultimately OPEC will increase production to offset Iraq. Or at least I'm hoping.

[onthepequod]

Originally posted by MagiK: Yes and as we all know, price at the pump has nothing to do with supply. Gas that the owners of stations buy at one price gets the price raised before the owner even has to buy at the new price...the whole petroleum distribution system is pretty corrupt...at least in my opinion.

I agree. Apparently Phillips Petroleum has allowed its Southwest reserves in Arizona to be completely drained. I would bank on any price increase at the pump partially helping them to fund resupply, above and beyond normal inventory turn rates, of this reserve.

[ 04-08-2002, 05:02 PM: Message edited by: onthepequod ]