Zeev's Turnips Patch-No Politics (ZEEV)

[basserdan]

*** Oil related post ***


Looks like crude oil isn't through with its downward pressure on the dow. Relative strength of the $wtic:$indu turned back up today in favor of the crude oil.
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Hi opnion,
i Just came across an interesting piece on oil that you might care to check out... especially the tables.


Raymond James' Energy "Stat of the Week"

Why Are Oil Fundamentals “Different This Time”?

Although there is some potential for near-term oil price weakness, as discussed in our November 15 “Stat of the Week”, we remain fully confident in our bullish long-term thesis on oil market fundamentals. We have said many times that we believe the oil markets have entered a new paradigm. Looking at the futures strip, it is clear that this “higher highs and higher lows” thesis is not widely shared by other energy analysts. In fact, given the surge in oil prices to all-time highs over the past year, most investors believe that oil prices are destined to retreat over the coming years.

Despite our short-term oil caution, we believe that the revaluation taking place in the oil market truly is “different this time” and longer-term prices are heading upward.

Geopolitics, which was largely responsible for the prior oil shocks, has so far been a relatively small factor in the recent price surge. The major shift has to do with far more bullish fundamental changes in oil economics: constrained supply that has had difficulty meeting sharply growing demand.
As “Hubbert’s peak” theory suggests, the point at which peak oil output is reached is likely less than 10 years away. If oil demand growth continues at anywhere near the same pace
that we have seen in 2004, the production peak could be sooner. After peak production is reached, political temper tantrums will only compound the oil market’s concerns and price spikes. This report was written by John Mawdsley, Energy Analyst at Raymond James Ltd.; he can be reached at [phone] or [e-mail].

Continued at:

http://beacon1.rjf.com/researchpdf/iEne112204b_1656.pdf