Oil Prices

[iso_55]

Hey Rod, you're not just a one trick pony. Figure skating, football & now an oil analyst. What a gas!

[Fraser]

Fraser. The volume on oil stocks doesn't appear to be sending any telling signals, indicating capitulation. In fact, the EIA oil inventory report shows a significant increase as opposed to a consensus decrease. That indicator might suggest that your theory is valid on this dive in prices is based on fundamentals, supply, rather than traders doing what traders do.

So, is the federal tax value per litre of gas a fixed cent rate or a percentage rate?

according to this http://retail.petro-canada.ca/en/fuelsavings/2139.aspx 10 cents to the feds, 14 to the province, a flat tax regardless of price. Naturally, gst floats.

With the TSX falling below 14K on pretty pedestrian volume, I wouldn't be surprised to see it test support at 12 or 11.5 in the next few months.

So GST generated in dollars from gasoline sales should drop, right? The Federal budget could be affected.

What did everyone miss in May when oil prices were flying? Did the supply and demand issues just materialize? Is the very rapid rise in the U.S. Dollar influencing the oil price, unduly?

Hadn't really though about the gst impact as much as the royalties received by the govt. Either way its bad for the budget.

I guess a couple things happened. No one bothered to think "hey we just got access to a billion barrels of something, will that affect the price. That combined with the slowdown in Asia, the stalling in Europe and OPEC willing to wait everyone else out to retain market share created a bit of a perfect storm.

The market is funny in how it will react incredibly quickly to some things on its own, and other things seem to stew until a catalyst triggers something.

[17to85]

Something to keep in mind is that oil production isn't just a switch you can flip and lower production. In many cases the lead up time to actually getting the stuff produced is lengthy enough it will take months to start and stop. So give it 6 months to a year and see what kind of equilibrium point is reached before we panic too much. 

 

One of the big problems is that oil companies are run by panicky idiots in a lot of cases and they like to make all sorts of bad decisions. If not for that I'd actually think a bit of a dip in the price of oil could be a good thing for Alberta. Cool down the economy just a little bit. 

[Rod Black]

Not counting the past week of declines, the big brains state that WTI oil has a 50% chance of rising to $66.50 in March and an 11% chance of achieving $80.00 in the same time period.

http://www.eia.gov/forecasts/steo/uncertainty/index.cfm

[Mark F]

already below 60.00 and some other big brains are saying it will go lower. I have no idea. Some shale companies are financed with junk bonds, so they have to keep drilling and pumping.

 

so they say.

[Fraser]

does anyone see a potentially dangerous corellation.?

 

http://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chfdeh=0&chdet=1420491600000&chddm=497743&chls=IntervalBasedLine&cmpto=NYSEARCA:OIL&cmptdms=0&q=INDEXTSI:OSPTX&ntsp=0&ei=YrWqVJGPFYm9qgHOwoCgBQ