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Just like to add this point here - most economies are based on energy - this is the bottom line. Oil in particular has this advantage over other form of energy source, it is the most economic form of "mobile" energy (as in transportation, distribution) that is needed by most economies. Hence regardless how negative the market view is, oil/oil price will recover. Just give it time. In fact I am expecting a strong rebound sometimes in the future, say by mid 2009 or earlier.
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In reply to: nohoper on Tuesday 23/12/08 10:29am

One Cup of Oil at US$147/bbl only costs US$0.22


yes - mobile high quality energy


so at US$40 that one Cup is now only US$0.06


or US$0.25/litre


so how much would you pay to get in your car with 4 passengers (getting 8lt/100km or 12.5km/lt) to avoid you and them having to walk 12.5km ?



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In reply to: db76 on Tuesday 23/12/08 11:47am

China's oil imports for October grew 28%

Slide 22/24 he says $147 oil prices were cheap!!!

Reported useable inventories very low!

Demand not slowing as fast as all perceptions!!


Well only had to look at the amount ofTraffic on the Pacific Hwy this morning on the north coast to see people have not stopped buying it here!!!!

Good pres thanks db76.

Cheers V1

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In reply to: db76 on Tuesday 23/12/08 12:47pm

The chart sometimes speaks volume. I take WPL as a key rep of the Aussie oil/gas sector. The distinctive 5 waves in its weekly chart speaks volume to me in this case, I would take that to mean the bottom has been reached and now it is making amend, forming a base and rebuild from here.


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A couple of page 16 events happening in the world of gas.


1. Russia continues with its attempts to organise a cartel of rabid gas producers:




2. And totally by co-incidence Russia is currently threatening gas supplies to Ukraine and indirectly to Europe. So at the same time the Ruskies are assuring everyone that any gas cartel that forms will be totally ineffective in strong-arming gas customers they're putting in a couple of body shots on the politically and economically fragile Ukraine. Maybe soon the ethnic Russians in Ukraine will need Uncle Vlad's help (?).



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In reply to: nohoper on Tuesday 23/12/08 03:33pm

Don't know, WPL broke the 200 day MA in September, its in downtrend. I'd be waiting for the triangle to break as if it breaks down it could keep going downwards to support which is long term more in the $15 area. If oil keeps falling which is could why not, everything else is getting smashed all the way back to support, and oil is already about $110 off its highs per barrel!


I'd wait and see what that triangle will do, since while its under the 200 day average I'd be careful, as it will be difficult to pick the bottom, WPL won't be racing up to its previous highs anytime soon I think.



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QUOTE (nohoper @ Tuesday 23/12/08 02:33pm)

Corrective Elliot waves are normally ABC in form I believe. Therefore your five wave cycle is probably confirming a long term down trend.


If so we should get a three wave corrective retrace - but I'd be more inclined to look for a three wave sideways cycle - which will be Big leg 2 of Big three or five down.


The third leg down is also probably tradeable like the one you highlighted - but normally it is the real killer.


It is also possible we've had the three wave corrective ABC with that short term double top recently but it seems too short to be likely at this time.


Always hard for me to see these things in real time.


That volume three days ago for many Oz oilers is real intruiging and I'm still struggling to see it as a bottom so I have to assume its actually a warning to us all.


Oil at 38.44 (down further) as I type


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Oil drops for second day on weaker demand worries

Natural gas rises as major producers seek closer ties; gasoline, heating oil fall

By Moming Zhou, MarketWatch

Last update: 3:28 p.m. EST Dec. 23, 2008Comments: 16NEW YORK (MarketWatch) -- Crude-oil futures fell Tuesday, following a 6% slump in the previous session, as gloomy economic news increased worries over weaker energy demand. Gasoline and heating-oil futures also moved lower.

Natural-gas, however, surged more than 8% as Russia and other major producers gathered in Moscow to seek closer ties. Russia Prime Minister Vladimir Putin said that the era of cheap gas is coming to an end, according to media reports.

Crude for February delivery closed down 93 cents, or 2.3%, at $38.98 a barrel on the New York Mercantile Exchange.

"Given thin conditions and continuing concerns about the global economy, markets may drift lower until the end of this year but stay broadly within a range centered near $40 a barrel," wrote Nimit Khamar, energy analyst at Sucden Financial Research.

U.S. gross domestic product contracted at a rate in line with economists' expectations. Inflation-adjusted GDP for the third quarter fell at a 0.5% annualized rate, unrevised from the previous estimate, the Commerce Department said.

It's the weakest quarterly performance for GDP since the first quarter of 2001. For the current quarter, economists are predicting a sharp decline -- in the neighborhood of 6% -- that would be the biggest drop since the early 1980s. See Economic Report.

Sales of new homes in the U.S. declined to their lowest level in more than 17 years last month, falling 2.9% to a seasonally adjusted annual rate of 407,000, the Commerce Department estimated Tuesday. See full story.

Oil ended down 5.8% on Monday, as demand concerns outweighed news that the Organization of Petroleum Exporting Countries could further cut production.

Crude imports to China, the world's second-largest consumer of oil, fell to their lowest level this year, the General Administration of Customs said Monday.

"The Chinese economy is rapidly losing steam, and is not proving immune, or 'decoupling' for that matter, from the weakness that is originating from the U.S.," said Edward Meir, an analyst at MF Global.

Meanwhile, U.S. crude inventories rose to 321 million barrels in the week ended Dec. 12, the highest level in seven months, the Energy Information Administration reported last week.

The EIA will release last week's petroleum inventories data Wednesday. Analysts surveyed by energy information provider Platts expect a 1.5 million barrel build in U.S. crude stockpiles.

OPEC President Chakib Khelil said over the weekend that the cartel is willing to further reduce output as much as necessary to stabilize prices, the Associated Press reported.

The cartel, which controls about 40% of the world's oil production, agreed last week to reduce members' quotas by 2.2 million barrels a day starting in January. The cut, however, failed to stanch the slide in crude futures.

Natural-gas forum in focus

Energy ministers from the world's largest natural-gas exporters gathered Tuesday in Moscow to finalize the rules of their new club, the Agence France-Presse reported.

The Gas Exporting Countries Forum, which groups Russia with other producers such as Iran, Qatar, and Algeria, tried to douse the expectations that it will act as the equivalent of an OPEC for natural gas, the AFP reported. Russia is the world's biggest gas producer.

"I emphasize that we have no intention of creating a cartel," Russian Energy Minister Sergei Shmatko said in an interview with the government daily Rossiskaya Gazeta on Monday, according to an AFP report.

Putin had said Tuesday that the world financial crisis could hit the gas sector harder than the oil sector, according to media reports. He also said gas producers will cooperate more closely to try and make the gas market more predictable, according to media reports.

With much of the U.S. in the midst of a cold snap, natural gas for January delivery surged 8.4% to $5.737 per million British thermal units.

In other energy trading, January reformulated gasoline fell 3.4% to 85.60 cents a gallon; it tumbled 8.6% on Monday. January heating oil fell 1.1% to $1.327 a gallon.

The national retail average price for a gallon of regular gas fell nearly a half cent to $1.659 a gallon overnight, according to auto club AAA.

Gas is 27 cents a gallon below what it was a month ago and $2.455 below where it was in July, when prices peaked at $4.114 per gallon.


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