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Goldman is the premier place for an MBA to go. But markets are efficient...
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But have they consistently been over optimistic in their forecasts of oil prices?Originally posted by Saras
Goldman (and its energy subsidiary J.Aron) indeed are one the largest traders in energy & its derivatives, and they DO have a reputation to uphold, but they have been wrong in the past (tech bubble, anyone?), and more so than some poeple with lesser "reputations". So this whole 'reputation' could be just a myth that they VERY skillfully maintain and use to their advandage.I drank beer. I like beer. I still like beer. ... Do you like beer Senator?
- Justice Brett KavanaughComment
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Originally posted by Saras
Goldman (and its energy subsidiary J.Aron) indeed are one the largest traders in energy & its derivatives, and they DO have a reputation to uphold, but they have been wrong in the past (tech bubble, anyone?), and more so than some poeple with lesser "reputations". So this whole 'reputation' could be just a myth that they VERY skillfully maintain and use to their advandage.
A mythical reputation that doesn't actually exist?
Rethink Refuse Reduce Reuse
Do It OurselvesComment
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I could see it going to $105 under a set of carefully chosen assumptions. The reason why I think it unlikely is that all of the rational market participants don't want it to go that high.
There are a few non-rational actors in this market, such as arguably Iran and increasingly Venezuela. Also there are a couple of actors whose investment is not strictly related to a maximization of long-term value, such as Iraq, Russia (in part), and Nigeria. All of these might have an impact on the margins.I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891Comment
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But Goldman is assuming that the price will increase that much before the producers can increase capacity enough to bring down the price, in fact Goldman assumes that the price will eventually come down due to decreased consumption.Originally posted by DanS
I could see it going to $105 under a set of carefully chosen assumptions. The reason why I think it unlikely is that all of the rational market participants don't want it to go that high.I drank beer. I like beer. I still like beer. ... Do you like beer Senator?
- Justice Brett KavanaughComment
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Most oil watchers laughed at Goldman-Sacks for that prediction. Everyone seems to agree that unless a major producing country is virtually shut down the prices won't spike that high. Instead they're likely to stay in the $50-$60 range.Try http://wordforge.net/index.php for discussion and debate.Comment
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$50 - $60 is good, its enough to start people switching to alternate fuel cars."Everything for the State, nothing against the State, nothing outside the State" - Benito MussoliniComment
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OPEC is running out of spare production cability. Oil prices aren't going down. The only direction to go is up. It's not like China and India are using less oil.Comment
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and that will only push oil prices higher - so much for OPEC wanting to keep oil in the $28-$40 a barrel band. hahahaa."Everything for the State, nothing against the State, nothing outside the State" - Benito MussoliniComment
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Rational marketers would want to keep oil within that band precisely because anything higher encourages both marginal producers to invest in exploration/production and consumers to invest in alternative sources of portable energy.
The reasons why we don't have oil prices within that band is because: (1) the rational marketers misjudged demand; (2) there is a lot of speculative froth in the market; and (3) some non-rational aspects are creeping into the market in the margins.Last edited by DanS; April 5, 2005, 15:31.I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891Comment
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Originally posted by Dissident
OPEC is running out of spare production cability. Oil prices aren't going down. The only direction to go is up. It's not like China and India are using less oil.
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Venezuela's economy is nearly entirely dependent upon oil prices so they are always trying to talk the market up. There is plent of spare capacity left.Venezuela is the world's fifth largest oil exporter and one of the top price hawks within OPEC, which produces nearly 40 percent of the world's oil supply.
-The Saudis say they could increase production in 72 hours though capped wells would have to be refitted and new wells drilled in order to sustain a big increase in output.
-Nigeria says it could increase production by 300,000 bpd without any new wells if OPEC would raise their quota.
-Russia says that state pipeline monopoly Transneft will increase it's pipleline capacity to the baltic sea from 150,000 bpd to one million bpd by the end of the year. Also in 2004 Russian production hit 9.5 million bpd which is only 1 million off of leader Saudi Arabia; that number is expected to rise in 2005.
-The UAE has 300,000 bpd spare capacity.
-Kuwait has about 100,000 spare bpd.
All of this adds up to there not being a shortage but that OPEC continues to hold back supplies in order to keep prices high. Much of the current price is also based upon fears of disruption in Iraq and/or outright speculation. Don't expect prices to go much higher in the short term unless there is some sort of supply break down.Try http://wordforge.net/index.php for discussion and debate.Comment
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There is at least 1 million bpd spare capacity out there right now in the OPEC countries. That doesn't count nonOPEC countries.Try http://wordforge.net/index.php for discussion and debate.Comment
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OPEC always say they have spare capacity, but in reality, they don't (at least not without major technology upgrades to their wells)Comment
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I wish California would get off of its ass and stop banning off shore drilling. We could be making a killing right now.Originally posted by Asher
$$$$ Alberta $$$$Try http://wordforge.net/index.php for discussion and debate.Comment
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