Little Fugue

Cognitive Effluvia

Friday, March 02, 2007

Saudi Arabia going dry?

This article observes that oil production by Saudi Arabia has declined 8% in 2006. Respondents to the article project oil jumping over $100 by this summer. Might be a good opportunity to go long. Heck, if a person didn't want to gamble on a futures contract, today they could pick up a deep in-the-money call option on August crude at $95 for just $140. If crude actually hit $100 before the option expires, that $140 could return over $5500, a return of over 3,900%. (Of course, that's a whole lot like betting on the 40:1 long shot at the dog track, but what the heck).

posted by Gregory Bloom @ 3/02/2007 07:24:00 PM

Comments:
In that vein, this is an interesting gedanken experiment on oil hitting peak: http://www.worldwithoutoil.org/Default.aspx
# posted by Bill F : 8:54 PM, May 05, 2007
 
An interesting alternative reality, but, because it has to be 'interesting', it strays pretty wide of the reality mark, IMO.

I think a shockwave event of oil disruption may happen at some point, and like the embargo of the early-70's, it'll provide the needed impetus to really start hammering on alternative technologies such as cellulosic ethanol and algal biodiesel, which seem like the lowest-hanging fruit to me. And perhaps it'll provide the motivation for us to begin strip-mining the moon.

(Say, Mr. F, you wouldn't be one of those Knights of Turin fellows, would you?)
# posted by Gregory Bloom : 10:02 AM, May 06, 2007
 
On the Turin Knight count: guilty as charged :D Flasshe (RW) pointed out your blog to me a few months ago, so I subscribed. Sorry I don't have a blog to offer in return, but alas I have nothing really to blog about.

Oil and its byproducts are so integral to the economy I find it difficult to guess all the ways $4/gal gas might effect things.
# posted by Bill F : 11:00 AM, May 07, 2007
 
Ah, so. A series of unfortunate accidents has brought you to my secret lair.

Now that I have a reader, I'll have to post more than 4 times a year. I don't see how having nothing to really blog about should slow you down - most bloggers don't really have anything to blog about. That's almost become the definition of blogging - people with nothing much to say writing for people with nothing much to do. Feel free to drop a line to my super-secret gmail account, Gregory.Bloom-at-gmail.com.

$4 gas will put a wrinkle in everyone's gravy, though consumption is probably somewhat elastic and will quickly regulate down. (The resident teenager in our house just bought a Ford Bronco. But he never drives it now, preferring to mooch his mother's more thrifty Ford Probe). Oil is still about 30% below its inflation-adjusted peak, so we have a ways to go before we're breaking new ground.
# posted by Gregory Bloom : 5:07 PM, May 07, 2007
 
Post a Comment