03.17.07
Oil downtrend: Opec’s hard time
Time has proven nothing can stop declining oil prices, when the market realizes that we still have plenty of oil to exhaust, in other words, supply can easily meet the current demand, amid doubts that this demand will keep increasing.
Now, many things that one day were considered very bad news and usually triggered uptrend in oil prices can’t really push the prices up:
1- Continues declining in US crude oil, gasoline & heating oil stocks
2- Iran dispute is heating up
3- Tension in the Nigerian delta & kidnapping stories…
OPEC THU meeting kept the outputs at its current level, but no doubt all OPEC ministers are worried while they are watching prices that keep painfully pulsing down every 2-3 weeks.
I still insist that oil fair levels are around $50 on the short term and below $50 when Iran nuke case will be closed peacefully for good.
Till that we - me & the OPEC ministers - will keep watching the prices 
02.24.07
Real Estate Bubble
Actually, I don’t have much to say about this global issue, while we still don’t have these transparent housing data in our region,but it seems that many people are sharing the same point of view, and their thoughts are applied to our region too …
Here is my only post about the subject, it was in last Aug.
02.02.07
Don’t let OPEC fool you
Another OPEC output cut is active starting 1st of Feb. This output cut (500,000 barrel a day), the cold weather in the world and especially in the US and Bush’s plan to double the oil strategic reserves, all together caused the latest rally in oil prices, but don’t let them fool you!
The market is used to these output cuts, and OPEC can’t threaten the world anymore by doing this, because markets know very well that at any time, when there is shortage in oil supplies, some of US closest friends who are major oil producers at the same time, will quickly react and increase their oil output regardless of OPEC decisions. I was happily watching the war of statements driving the prices crazingly up & down, while OPEC were discussing the output cut and its size, Saudi oil minister announced that his country is working to increase its crude oil production capacity by nearly 40% by 2009.
Actually there are some international players, who are affected badly by these lower energy prices, such of Russia, Venezuela & Iran, and I expect that these states will try everything to push the prices up.
It’s very unclear what is going to happen in the near future, while the development of Iran nuclear case will keep shaking the markets, but again, be sure that these geo-political horses will only have short term role in driving energy prices.
Gold: New Rally?
After the GDP advanced estimation for the fourth quarter of 2006 showed less growth with higher inflation figures, I think the markets now is waiting for the recent CPI/PPI data, and if these data sparks again the inflation fears, we will see another gold rally breaking many resistance levels.
And it will need more data to decide if Gold is going to sustain these new highs and move forward or will retrace to its 600 levels.
Clearly, the inflation is still there, and Gold will react against it quickly and roughly.
01.18.07
The End
Here I am again after a long vacation, just with a happy end for a harmful story, called “Rocketing Oil Prices”
On Friday, August 11th, 2006, I wrote a post titled “The future of oil prices” little after the Israeli war on Lebanon. In that article I stated how these high prices are geo-political, and when it comes to the demand and supply, it seems we have enough oil supplies and we don’t see any shortage in the near or longer term. At that time, oil was above $75 a barrel.
“What will happen the day after closing Iran nuclear case for good?
This is something is not going to happen soon, and we will pass painful times before we see this issue closed, but once it is closed, we will absolutely see a bloody crash in oil prices, the final target for this crash might be in range $40/Barrel.
As a clear example clarifying that the current prices are political more than economical, Oil lost $3-$4 a barrel immediately after announcing a ceasefire in Lebanon!”
On Saturday, October 14th, 2006, I wrote another post regarding the same subject, titled “What’s wrong with oil prices?” immediately after oil hit $58 breaking many support levels, it was alarming for OPEC, who reacted quickly and announced output cut by 1.2 million barrels a day.
“Actually money-addicted OPEC ministers were talking about this production cut since months, but of course not in front of cameras, they kept saying in their statements that even if we are going to make a reduction it will not be in the near future or not before the summer. And believe it or not, these ministers know better than anyone else if the current oil supplies are enough or not, because this will affect their pockets immediately.”
After announcing the output cut, analysts start talking OPEC can maintain the minimum level of oil prices while it has no control when the prices going crazy, and this was insane, no one other than demand & supply can maintain high/low levels in any free market. And this is what I tried to say in my post titled “Greedy OPEC!” dated Sunday, October 22nd, 2006.
“You know what, I believe no one has long-term control on the markets, all what they –OPEC ministers- can do is to delay the decline in oil prices, may be we have weeks or months before we see oil below $50 -of course this depends on how Iran’s nuclear case will end-, during this they will work hard to push the prices as much as they can, sooner or later the market mechanism will break their “Output Cut” arm!”
Now, after oil hit its 19-month low record, I can’t hide my happiness, I’m happy because people will run their cars at lower cost, I’m happy because I was not blind and I was reading between lines.
I feel good
12.23.06
PPI Surprises
Again, PPI surprises me (and may be the markets) being higher than all expectations, even extreme expectations. 2.00 % for PPI & 1.3 % for Core PPI, it really shocked me.
Anyway, it seems this couldn’t change the down mood of the gold, it was only small up shocking plus, and no real change. But I can see behind this was the final estimation of the GDP value for the third quarter, it came less than expectations 2.00%, which was initially expected at 2.2 %, I think this number could pull down the gold after PPI numbers.
12.18.06
Gold Count Down
Tomorrow is the day!
After the very low CPI, Core CPI numbers (for November), tomorrow we will get the PPI, Core PPI numbers, that should be lower than ever, then we will say good bye “2006″ and good bye to “Gold Prices above $600″
Catch your breath, Gold is down
OPEC & the Output Cut Game
Again OPEC to cut the output by half million barrels a day on Feb. OPEC argued that the market is still over supplied, and they are right.
I think the $57 level -that is reached few weeks ago- had alarmed OPEC ministers as there is no minimum level can be maintained. I think we are going to see oil going below these levels, as they are lowering their forecast for the next quarter demand.
12.15.06
Good News for the US Dollar: CPI 0.0%
It has been a long time since my last post, but really I was waiting for this day passionately, when the CPI and PPI (in the next week) will show a real change in the trends. And beside the trade balance of -$58.9B, 4 billions less than expected and “Net Foreign Purchases” that is announced today at $82.3B showing a huge increase from Sep number. I think all these numbers are talking about the same thing, a stronger dollar in spite of its latest decline against the Euro. Moreover less inflation, this will make things harder for Gold.
You will see Gold stuck at this level for long, or you will see it declining, and that depends on several numbers, the above ones are some of them. Stay online so I can keep you updated.