-1 vote

Iran can't find a buyer for their oil

The bottom is falling out of the oil market. I've been arguing for a while now that the recent run up in oil is simply money looking for a home...people bailed from derivative based investments and have bought up oil at any price.

This is further arguing that the oil spike is unsustainable. Iran is having a hard time finding buyers for oil, even at $10 below West Texas Intermediate Crude. This article talks of refinement capacity, but I think that's the wrong animal to point at.

http://www.iht.com/articles/2008/05/15/business/15opec.php

The problem Iran is facing is they are embargoed from selling to the US. They sell to Russia, China, and others, but not to us.

People in the US can (begrudgingly) afford to pay $124 a barrel of oil. China simply cannot, and it is starting to show. The market for oil is drying up at these prices, which point to one thing...a huge fall in prices.

Please don't believe the media hype about $200 oil in the near future. It isn't going to happen, unless someone in the world does something truly stupid.

China can't afford the oil now, and the US is cutting back. People aren't going to be driving anywhere but to work and back this summer, flights are being cancelled all over, people are scraping for local suppliers for food since fuel costs too much to move it. The US consumption is down, and the rest of the world simply cannot afford oil where it is.

You're going to see the oil ceiling in the next 2 weeks...they may be able to scare up enough fear to get it to $128-130, but then the fun begins.

US consumption is down, China and Indian consumption will virtually dry up, and oil will begin it's fall. It's going to be glorious to see all those malinvesting prospectors get crushed in the face of logic overcoming fear and panic.

Oil is coming down...things are looking up!

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Interesting.

I really have nothing to add to this except that I find this sort of talk to be very interesting. I thank anyone on here who seriously analyzes oil prices and can interpret where they're going to head. I actually have to do a lot of traveling this summer so any relief is quite welcome.

Simply Amazing ..

Why is it I havent seen a single comment to this post that connects the dots ..
We debate this or that, heavy crude, light sweet crude blah de blah and noone makes the connection.
Does anyone still wonder if this BUBBLE is speculative?
Do a news search for the words "iranian oil production".
Amazing.

http://news.search.yahoo.com/news/search?p=iran+oil+producti...

4 pages of hits detailing crude oil running up 5% on "iranian supply concerns".
Umm, wait a minute. Isnt that the same story JZNEFF linked to?
So why did this irelevant (to some) story lead our sane and functioning commodity markets to view this as the equivelant of an embargo threat and run the price that you and I will be paying tommorow up even higher?
SPECULATION ...
case closed.
Now name one speculative bubble that has proven to be either sustainable or healthy.
Wanna bet most of these asshats are the same ones that fueled the real estate bubble and are now lining up in Washington with their hands out?
Its all crazy.

why would Iran sell Oil to

why would Iran sell Oil to Russia.. Russia has more oil than Iran?? the chinese can afford all the oil Iran wants to sell! that is why they are making deals all over the globe including canada to buy oil from the oil sands! I hope your right tho.. we need 50.00 per barrel oil! it would help business and families greatly! but with the threat of war in the middle east I don't think we'll see it anytime soon.. just as soon as oil would drop to 100.00 bucks i bet they would pull some kind of limited war out of the hat in the middle east to keep the prices high! remember.. bush and dickless cheney are oil people!

as for me and my home, we shall worship the LORD

I think $70 oil is a

I think $70 oil is a pipedream at this point, with the continued growing demand from India and China and others, and the continued fall of the US dollar (4% inflation? Yeah, right!). Sure, it could temporarily drop to that price, but the days of petroleum priced at that level indefinitely are longgggg gone. Can you say "Peak Oil"?

(BTW, "Peak Oil" does NOT refer to oil production "coming to an end", which it almost certainly never will, but rather to the rising demand curve combining with the falling production curve to radically push up the price. Even if oil production merely plateaus (as it appears to have done already), and were to stay at that plateau indefinitely, rising world demand would still push prices skyward.)

Speculators can not force a trend that doesn't already

exist. Key numbers to watch.

Dollar value
World demand (Until now, oil didn't quite jive in the supply/demand models.)
Volitility idex
Geo-political events (fear index)

Correct, rhino! I am just

Correct, rhino! I am just old enough to remember Nixon blaming "speculators" for our "out of control" 4% inflation in the early 1970's, not to mention many recent, oh-so-economically astute comments by that lover of freedom, Robert Mugabe, blaming those "evil speculators" for Zimbabwe's 250,000% inflation. Speculators follow the trend --- they do no set it.

thank you.

thank you.

10 cents isn't much, but...

the price on the barrel fell by ten cents yesterday. Is this a possible beginning of that downward trend?

Like Tony Bennet once sang, "I want to be around to pick up the pieces when somebody breaks.." their barrel? "cuz it's going to make my heart sing to see some greedy, greasy fools lose a few of the dollars they stole from us.

China practices price fixing

China practices price fixing on their oil as well as india so they can continue for a LOT longer than the US can at 127 bucks a barrel. Also, they are drawing down their production of HEAVY crude, not sweet crude. Big difference.

Price fixing doesn't work

They can fix the price all they want...it won't work. You can't pass a law that says Iran must sell us oil at this price...Iran will tell them to go piss up a rope.

Price fixing doesn't keep prices down...it creates artificial shortages. Nixon tried this nonsense with oil, and we waiting in gas lines for hours, remember?

If it's heavy production that's down...wouldn't Canada or Venezuela have a problem finding buyers? It's only Iran, largely because they can't sell oil to the US.

ummmmmmmmmmm i dunno WHERE

ummmmmmmmmmm i dunno WHERE you are getting your info from. The US is still buying it's oil from Iran. Price fixing works short term. Also, that's not how price fixing works. You don't tell the seller what price they are going to sell at. You buy it at the price it goes for and sell it in the local economy for less. You make up the difference elsewhere. The article says it's heavy production that is down. Im just reiterating what the very article you linked says.

If Iran refuses the American dollar

oil would drop in price to China and others --No?

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Mathew 5:9 Blessed are the peacemakers: for they shall be called the children of God.

Not immediately

Long term, maybe, but the market is set for now. They can sell oil in Euros, but they'll sell it for the market price as set by the petrodollar. Iran won't accept less for their oil, Euro's or not, than they could get through London or Dubai exchange.

Besides...Iran isn't selling oil for anything but dollars. Their oil bourse has not started selling crude...only some plastics and crude derivatives. They're trying to set up a capitalist institution, and they're still too dialed into collectivism to get it up and going very fast.

Iran's bourse is going to take a while. It's being set up by beaurocrats and amateurs, because no one from US, Japan, or West Europe is willing to help them.

ummmmmmmm iran is NOT

ummmmmmmm iran is NOT selling their oil in dollars. They, along with venezuela, have completely decoupled from dollar sales. Go do some more research bud.

nooooooo

Nooooo...they're not. They have talked about doing so...but where would they sell the oil if not in dollars?

There are 3 crude exchanges in the world (unless you count that bourse, which doesn't sell crude yet) and none of them use anything but USD.

There is NYC, London, or Dubai. I would be interested to find out where they are selling oil if not at one of these exchanges. I've done my research bud...and it doesn't amount to reading some saber rattling by Iran or Venezuela. They would like to decouple...but there aren't any other options.

the chinese are buying with

the chinese are buying with their own currency.. the chinese can take every last drop of Iranian oil and still need more!

as for me and my home, we shall worship the LORD

dood, oil is a commodity

dood, oil is a commodity sold on the open market. The us is buying it's oil from iran through a middle man.

http://www.presstv.ir/detail.aspx?id=45397&sectionid=351020102

Seems like someone has a bit more studying to do.

GREAT

catch from a NOT know it all here.

And, it's "Dude" but yours if funnier!

I sure

Hope UR right!

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This is interesting.

Won't China need quite a bit of oil in the coming months getting ready for Olympics and during Olympics for moving all the visitors around? Peace

Prepare & Share the Message of Freedom through Positive-Peaceful-Activism.

Big difference

Yeah...they'll need to oil, but it'll be the commie government paying the bill. They can afford the oil, since they have a right to steal from their people.

Who can't afford the oil is the Chinese business, or the Indian consumer. They're going to go into a recession if the oil stays where it is.

We can handle it, but they'll need more customers than the US if they want to prop up this price.

meekandmild's picture

I hope

your correct. I do no more driving than neccesary and I only buy what I need, no eating out, no going to the movies, no going to sporting events, I've gave up my satillite TV. getting my staple items in bulk, growing my own food, eating wild game and fish. hoping to raise my own beef, pork, chicken and eggs. we're co-oping with other farmers to trade for what we need.

Wow

I guess i'm too much of a mindless consumer, but i'm definitely doing less driving these days. You make me feel like a slug, at least I shut my home phone off.

I bought a tankless water heater to save on propane...and i'll gladly take my $300 bucks back...thanks Uncle Sam. (tax credit)

Luckily these days, i'm a whore for corporate America, so we're staying above water....but that'll only last if the economy doesn't heat up a little.

Keep the faith, my friend, people cannot bear the cost of oil where it is for very long, so it has to come down.

meekandmild's picture

just trying to get self-supporting

I'm working on designing a water wheel to produce my own electricity, I've got the water spply to do it. I'm all electric, working on buiding an outside wood furance, with all the trees down from the storms, I have plenty of wood to burn.I'm on prepaid cell service. I'm considering shutting down my phone line and internet, maybe after Nov.
If we stop spending on non essentials. we might be able to get enought panic going to bring down cost on everything just not fossel fules.

L@@K

You must live your best life now and quit dwelling on unknowns!

How many weeks, months, years are you willing to 'huddle"?

Be prepared but not anal!

You've turned your brain on and are figuring how to utilize the elements at your disposal. So, keep YOUR brain wheels turning to produce value which someone else is willing to purchase. DON'T STOP NOW!!!

And, if you shut off communications, how the heck are you going to find out what is really going on?

We want to create value and exchange - simple as that - like when the doctors used to accept chickens as payment for medical services.

Sure, their life was simple but fulfilling!

So, LIVE your BEST life today and tomorrow will take care of itself.