Comments on: Can the Oil Market Keep Up With Oil Prices? http://dailyreckoning.com/can-the-oil-market-keep-up-with-oil-prices/ Entertaining Ideas on the Economy, Markets, Gold, Oil and Investing Strategies. Sun, 21 Mar 2010 22:00:29 +0000 http://wordpress.org/?v=2.9.1 hourly 1 By: Mark http://dailyreckoning.com/can-the-oil-market-keep-up-with-oil-prices/#comment-33204 Mark Mon, 19 Oct 2009 21:25:59 +0000 http://dailyreckoning.com/?p=19333#comment-33204 Did you know that the American government imposes HEAVY penalties on conversion of existing/used cars to natural gas guzzlers? What do you think will happen when they decide to remove that penalty and put it the other way round -- the support for natural gas is rising tremendously. If the Chinese consumer cannot pull the world out of recession, why do you think he can afford to buy so much oil at 80 US$ or more? From my point of view, that is all nonsense. The current price trend is because of idiotic speculators and nothing more. Look at the contango development!!! There was NO CONTANGO AT ALL until the price dropped from over 145 US$ to approx. 70 US$!!! During THE WHOLE RISE OF OIL PRICE to 147 US$, the market DID NOT BELIEVE IN HIGHER PRICES! It believes now because the participants look back and see: that must be peak oil. It is real. The truth is: there was no shortage of oil. There was a shortage of high quality oil suitable to produce gas with low sulfur content and using the existing refineries which were not upgraded due to too low profits. Did you know that the American government imposes HEAVY penalties on conversion of existing/used cars to natural gas guzzlers? What do you think will happen when they decide to remove that penalty and put it the other way round — the support for natural gas is rising tremendously.

If the Chinese consumer cannot pull the world out of recession, why do you think he can afford to buy so much oil at 80 US$ or more?

From my point of view, that is all nonsense. The current price trend is because of idiotic speculators and nothing more. Look at the contango development!!! There was NO CONTANGO AT ALL until the price dropped from over 145 US$ to approx. 70 US$!!! During THE WHOLE RISE OF OIL PRICE to 147 US$, the market DID NOT BELIEVE IN HIGHER PRICES! It believes now because the participants look back and see: that must be peak oil. It is real.

The truth is: there was no shortage of oil. There was a shortage of high quality oil suitable to produce gas with low sulfur content and using the existing refineries which were not upgraded due to too low profits.

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