Saudi Arabia's oil minister said on Sunday (April 17, 2011) the kingdom had slashed output by 800,000 barrels per day in March due to oversupply, sending the strongest signal yet that OPEC will not act to quell soaring prices.Well, I guess that worked.
I would say it worked just about right for the Saudis . They called the market correctly as oversupply. The "players" who are getting a haircut are the longs who dont produce or use a drop of oil but just try to make money by timing the market. Market timing doesn't work, there are too many unpredictable events. Pure traders serve no good purpose in commodities markets.
ReplyDeleteAbout a month ago it was pointed out on CNBC that no one makes any money when the market only goes up. There needs to be volatility.
ReplyDeleteThe oil companies are used to boom and bust; it doesn't make things easier, but they have seen it all before. And, this is hardly a bust for the oil companies.
I think the real losers are wind and solar advocates. It is very difficult to sell wind/solar on price when natural gas goes even lower.
There are lots of ways to play this market. But again my focus is on the excitement of the Bakken, and not the investing aspect. (Although that's hard to see due to all my investing posts.)
EOG says the Bakken is robust at $40/bbl.
I won't time the market; I am not agile enough. But some folks have done very well. George Soros who sold his gold/silver just before the crash is but one example, at least based on mainstream media reports.
And some folks have not done so well; the Hunt brothers come to mind.