Get set for oil market FIREWORKS. Iraq rejects terms for further oil sales. : LUSENET : TimeBomb 2000 (Y2000) : One Thread

Oil prices are gonna be up through the roof tonight on NYMEX Access and in the regular trading session tomorrow. Because the UN Sec Council was unable to come to terms with the French and the Russians on putting a lid on the rollover of the 6 month Iraqi oil for food deal, a stop gap two week Iraqi oil sale deal was approved on Friday. On Sat Iraq rejected this deal and said they're gonna stop loading tankers as soon as those currently in port are done. (Could someone link in the appropriate stories. Por favor.)

So a big Bravo for our resident oilmeister - Gordo Gecko. His contentions that Hussein is taking big Brent positions and then is gonna capitalize on all this y2k mess by throwing a monkey wrench into the UN oil for food deal just took on increased credibility. This is the first time in three years the Iraqi oil export program is gonna be seriously suspended. Hussein knows a monkey wrench in oil markets right now will extend to a big disruption of our stock markets and western economies. Considering how tight oil markets are, rachet y2k related chaos up another few knotches. Things are gonna get real interesting. If we lose Iraq's 3 million barrels a day we'll be up through $30 by the end of the week.

Sell the SUV and get the ol' bike out.

Got length (oil market)? Got shorts (stock market)?

-- Downstreamer (, November 21, 1999


Another por favor. How about linking in the thread where Gordo made his Hussein's long Brent futures contention. Gracias.

-- Downstreamer (, November 21, 1999.

--HA! I got a post on the martial law thread belowing about war (bigger than at current levels) with Iraq for the near term. Seems even more plausible now. Don't know beans about the nuances of the stock market and commodoties trading, but have a smattering of power politics insight. So, I'm curious, what do ya'all economics specialists think will happen now, and the time frame. thanks! zog the curious

-- zog (, November 21, 1999.

You said: If we lose Iraq's 3 million barrels a day we'll be up through $30 by the end of the week. I can not grasp the end result of this. Did we lose them or not? I am so mad, there was a single article in my state newspaper about this this morning. This is dreadful news.

-- Carol (, November 21, 1999.

Oil up $6 a barrel and Dow off 10% within 2 weeks (next week is shortened).

-- Downstreamer (, November 21, 1999.

Yeah, like all Iraqi deals its rather nebulous at this point. They verbally rejected the two week extension for oil sales. Quoting a Reuters story, "It was not immediately clear what, if any, practical consequences of Iraq's rebuff would be-wheather or not it will halt oil for food...."

We all know Hueseins an egomaniac. Hes gonna watch oil prices skyrocket and stock markets start to slip and he'll love the attention even if he wasn't long oil futures. Oil prices have been right on the cusp of causing inflaionary concerns. How reassuring is it to know Hussein is at the switch of a huge oil market factor that can truely burst this financial bubble?

-- Downstreamer (, November 21, 1999.

Here's a link:

-- cb (, November 21, 1999.

$30 a barrel oil. The answer to many Texans' prayers.

-- mommacarestx (, November 21, 1999.

Does this let Greenspin off the hook? He can't be blamed for inflation and what the future holds for the stock market or Y2K. This is Iraq's way to get even with us.

-- bardou (, November 21, 1999.

So, you're all speculating there will be a shocking and mind blowing jump in gas prices? That variables are kicking in and the gas crises will be worse than expected?

To those involved in stocks ecetera what predictions can you make at this point about what we will see unfolding down here In Normal Land? 5 dollars a gallon in places like CA?

-- Paula (, November 21, 1999.

Paula, I predict $2.00 - $3.00 a gallon by January 1.

-- bardou (, November 21, 1999.

I think I just now really GOT IT. I have been preparing for y2k for a long time, but I never really thought about the outcome of major big time trouble. Now something that is hitting home like the oil report has me really scared. I have things do to! I need to use my car! I have to get to the doctor and dentist and the store and my Christmas shopping isn't done! I have company coming for the holidays, I have to pick them up from the airport! I have to go get the grandkids who live in another town. I have to go to the bank! I am not ready for this. This can't be happening. NO! Wow, can you imagine the panic if there is no gas? or it is too expensive to buy? Will the public even consider this is what the GIs have been trying to say for the past several years?

-- Carol (, November 21, 1999.

Oil will be the harbinger of things to come!!

-- db (, November 21, 1999.

I wonder if Iraq, Bin Laden, etc. are thinking of other ways to disrupt supplies over the next month or two in order to worsen the effects of y2k. Perhaps the government is correct in thinking there will be many terrorists activities when y2k arrives. Y2k panic buying of gasoline and heating oil and supply interruptions of crude might be the trigger for the end of the bull market in stocks. It also might be a trigger for a run on banks and grocery stores in late December.

-- Danny (, November 21, 1999.

This is very serious indeed. Since the announcement was made over a weekend, I share the opinion that oil prices are likely to go sharply higher in a short time span. This is going to HURT.



-- Irving (, November 21, 1999.

Just found this article on Yahoo. Definitely worth a close look.

-- Irving (, November 21, 1999.

the saudis and kuwaitis are able to make up the difference. They know all about the need to keep the price of gas reasonable. Otherwise the economy falters and gas consumption goes down.

Market forces are more complex than I guess you realize.

-- billburke (, November 21, 1999.

billburke commented:

"the saudis and kuwaitis are able to make up the difference. They know all about the need to keep the price of gas reasonable. Otherwise the economy falters and gas consumption goes down.

Market forces are more complex than I guess you realize. "

Well billburke maybe you can expain where the market forces have been for the last 11 months when crude oil more than doubled in price!!


-- Ray (, November 21, 1999.

Was perusing some investment sights, seems some DGI perma-bulls are urging their clients to get a jump on the January BITR y2k rally. The trap has been set and many investors will be snared on this one.

THANK YOU GORDO, thank thank thank you for the info.

-- squid (, November 21, 1999.

I have this coming week off, due to the fact that school is out for the Thanksgiving holiday (I am a teacher) then when we get back we are there for three weeks before getting out Dec 17 for Christmas holidays. So 15 more days of making my one-hour-each-way-in-rush- hour-Dallas-traffic commute. Please God don't let gas prices go any higher.

Might be starting to eat those stored foods before the rollover.

-- preparing (, November 21, 1999.

To The Teacher:

Could you and a few others pull off rolling out sleeping bags on the school room floor at night? Or in the teachers' facilities?

-- Paula (, November 21, 1999.

Do you think oilwells in Kansas will be nationalized?

-- Laura (, November 21, 1999.

Paula: I guess, but why would I do that?

-- preparing (, November 21, 1999.

Nationalizing oil wells in Kansas? Can anyone answer this or just those heavily involved in the stock markets?

I think anything the military super power needs to retain itself will be done, but it won't be done so Mr. or Ms. Public has any because the super power would be retaining itself, to prevent a communist revolution which "nationalizing Kansas oil wells would be."

-- Paula (, November 21, 1999.


I DRIVE for a living. I lose 7% of my measly 40% DIRECTLY to fuel at this point. Gas goes to over $2 a gallon and i start not making a living. NOT to mention that i can't fill my personal tank farm until i get at least two more paychecks. I WAS planning on buying the K-1 and the gas next week (and shorting a couple other bills) NOW I have NO CLUE as to when to try to fill the tank farm.


-- Chuck, a night driver (, November 21, 1999.

I hate to be the fly in the ointment, but did you all forget how oil climbed to something like $40 per barrel during the Gulf War?. People hardly noticed.

Not saying its just going to be business as usual, but I do remember oil going through the roof and JQP didnt notice it.

-- hamster (, November 21, 1999.

he he! I'm hoping it goes through the roof without being nationalized!

-- Laura (, November 21, 1999.

Chuck, the phrase being prepared takes on a whole new meaning when things really seem to be happening. We have no gas storage tanks at all, or even a barrel or two. My dh kept saying he will do it later. I hope this wakes him up to the fact that anything could happen over night. Maybe this is just false warning to give all of us who thought we were prepared a wake-up call.

-- Carol (, November 21, 1999.

To The Teacher,

To bail out of some gas costs if needed so's you don't have to tamper with your stash until absolutely necessary. It wouldn't be too grim if some others were there, but by myself? No way.

-- Paula (, November 21, 1999.

I'm sorry,

My last post was heartless, and thoughtless. I have an aunt that has an oilwell in Kansas, and I got a little excited.

Please forgive my rude behavior.

-- Laura (, November 21, 1999.

Please clarify. Surely not ALL of Iraq's 3MM bbl/day goes to the USA, the Satan of the West?

I assume that the US state dept will be twisting Saudi Arabia's arm to boost output to make up for any shortfall.

Also, the stat I read just days ago stated that the US imports 1.7MM bbl/day from Venezuela, and that is almost exactly 10% of the US oil consumption.

Venezuela produces about the same, then, as Iraq, as I recall, about 3MM bbl/day. 1bbl=42 US gallons.

Now we'll see what happens when the stock market is now priced for perpetual prosperity, and the average Joe EXPECTS to make a minimum of 22%/year from now onward in the stock market. I think that could be realistic, except they FORGOT THE MINUS SIGN!

-- profit of doom (, November 21, 1999.

Actually, Paula, my parents live 5 minutes from the school, have plenty of room and have suggested I stay there during the week and go home on the weekends. Tempting, true, but I have a husband and I really don't care to only see him on the weekends. And my daughter would only see him then, too.

We did that the first 18 mos we were married and it sucked, quite honestly. Can't neglect the marriage. Unless gas gets up to $5 a gallon, then it's "See ya Saturday, hon!" ;-)

-- preparing (, November 21, 1999.

Let me tell you what I did.......

We have a Kroger subsidary, Country Oven Bakery, in Bowling Green, Ky. They gave me all the FREE 55 gal drums that I wanted.

Last April I purchased 400 gallons at 85.9 cents a gallon. This past Friday I purchased 535 more gallons at $1.139 a gallon.

I added PRI-G, obtainable just about everywhere, to condition the gas. With regular conditioning, my gas will last for 3-5 yrs.

I now have enough to run my gas generators and my autos when times get tough. In the meantime, I will keep on buying gas at the station.

You can do the same, even if you have to pay $10-15 for the barrels.

DD1stLight, an oil consultant, which many of you have read about, says we won't be able to buy gas by 1st to middle of February.

You be the guide! Can you afford to place your (life) in the hands of gasoline availability???????????????

-- Vernon Hale (, November 21, 1999.

Does anyone notice that cockroack ken and "Truth@theReady never comment on oil threads? Is there finally an area where they believe (incredibly!!!) that they are out of their depth??(depth of a saucer)

-- catfish joe (, November 21, 1999.

Sunday night oil market update:

Crude opened 50 cents / barrel higher and then shot up toward $27 (+.85 cents from Fri's close). I'll go higher tomorrow.

I agree with Bill Burke - the Saudis will crank it up to make up for any Saudi shortfall. The oil market will pull back in reaction to this and/or Strategic Petro Reserve sales talk. But this will be a correction to buy into. With y2k complexities we're gonna get into panic type buying. Even if the Saudis crank it up by 3 mil bls a day we're bumping up against full production capacity. Who's gonna be able to open the spigots further on future unexpected disruptions (ie y2k). Plus there's a lid on the market economics now because most figure the Saudis will crank it up if oil gets up to $30. Like the pre-Gulf war market, if there's no spare production capacity, they can't. Thats why crude went to $40 in Oct of '90.

Profit, The US doesn't import Iraqi crude. So what? If you take 3 mil barrels a day off world markets it doesn't matter if its flowing here or anywhere else.

-- Downstreamer (, November 21, 1999.

For those of you too young to have lived thru or remember the "oil shortage" of the 70's, I have two important words for you... LOCKING GASCAPS. No joke. People would siphon other folk's gas tanks whilst they were sleeping soundly in their beds. Buy one and sit tight. IF the price of gasoline goes thru the roof, you can always put it on your car. You'll be glad you did.


-- beej (, November 21, 1999.

* Bank Runs / Market Crash by 12/99
* Major Oil Problems by 1/00

just what I've been sayin for the past year.

-- Dan G (, November 21, 1999.

As far as the price of gas is concerned, whatever happens we deserve. We didn't learn a single lesson from the Arab oil embargo. Our percentage of imports are much greater now than then.

Its funny, I remember something a friend and I did during the oil embargo. I had some stickers printed that said, "The price of gas is because of gas hogs like you." The o in hog was like a pigs snout. My friend and I stuck them on all the cars that we thought got poor gas mileage (the cars that looked like spare living rooms). I was a teenager then but it still fits. We have short memories and we're all going to be strung over a barrel sooner or later.

People have been buying tank SUVs like gas was $.50 a gallon. Americans confuse the word conservation with consumption. HEE HEE HEE, all those $30-50,000 SUVs and their gas bill might pinch their wallet.

-- Guy Daley (, November 21, 1999.

As long as we're into bumper stickers:

I liked best the one we saw quite a few times around Anchorage.

"Please God, Let there be just ONE more oil boom and this time I PROMISE I won't piss off all the money"

-- Greybear (, November 22, 1999.

Good to see you checking in GreyBear! Did you read the "Oil To Fork" essay a few weeks ago? What was your opinion of it? Don't you live in East Texas? If you know any "oil people", what are they saying in your neighborhood?

-- jeanne (, November 22, 1999.

Greybear, there was a petroleum geology professor named Berg (old guy, ran for President of the American Assn. of Petroleum Geologists once) at Texas A. & M. who in the mid-1980's had a bumper sticker on his wall that read precisely as follows:

"Dear God, please let there be another oil boom. I promise not to piss it all away this time!"

Is this how the one you quoted ran?

-- MinnesotaSmith (, November 22, 1999.

Moderation questions? read the FAQ