WAR!!

boygabriel

I think you're over-thinking the drawing. I don't think it's taking it as far as "Russia threatens supply, oil prices go up, bad for the West".

I think the cartoon is simply referencing the fact that Georgia's pipeline allows the US and other countries to avoid Russia on that particular route, and Russia wouldn't mind changing that fact.

jeffrey wrote: [quote=Boygabriel][quote=jeffrey]Except that it has had absolutely zero effect on the price of oil, oddly enough.

I don't think that's what the cartoon was saying.

I suggest you have another look at the cartoon. That's precisely what it (rather inaccurately) implies.

Specifically:

The cartoon showed Russia stomping its boot down on an oil pipeline (one that happens to supply 1% of the world's oil, btw...) choking the pipeline down to a mere trickle.

That implied supply shock should technically impact oil prices upward in the same way that prices are when flows are disrupted elsewhere (by rebels in Nigeria, etc.).

But as I mentioned in my comment, this has not been the case, in reality.

Instead, oil prices have continued their steady plummet from record high of $147.27 on July 11 all the way down to $112.17 yesterday, based on a diminishing global demand picture through at least the next year or so (based on downward-trending overall economic production worldwide, therefore lower demand and prices for oil on the whole, speculators and otherwise-accurate CIBC forecasters be damned).

One would think that at least the speculators might jump to trade on whatever supply shock the cartoon [thus far incorrectly] implies to at least resist that further downward slide in prices, but my point was that no, this whole Georgia / S. Ossetia thing has had absolutely zero effect on oil prices, contrary to the cartoon implying that there has been a significant choke of supply.

Capisce?

***edited to add link to recently upward-revised CIBC oil prices forecast

jeffrey

Boygabriel,

Yes, I am totally over-thinking it, if just for the sake of amusement.



And yes, it certainly may depict what you describe, for those political and economic intrigues are the first things that come to mind upon first seeing it.

What I am noting is that, in reality (beyond those intrigues), it failed to be accurate on the level of fundemental repercussions it implies.

Again, initial impressions aside, it's odd and notable that such actions, in reality, had little reported impact on prices. For all its Cold War / regional instability implications (combined with recent US defense agreements with Poland and the Ukraine, further tightening the screws on US - Russia relations..), was just noting that this somehow had much less impact on oil prices than...say...the mere projected threat of a hurricane hitting the port of Tampa.

But yeah, what fun is all of this unless my posts are utterly overwrought? (in classic Fiberama stoop awning fashion, hah).

Mea culpa there.

doctorj

jeffrey wrote:
SHORT GSE ETFs, UNHEDGED

Awesome analysis, but unfortunately it was a trick question. There are no GSE ETFs -- volume is tiny on the 163 securities on the GSE, and trading infrequent, which I think makes it hard to short.

boygabriel

What language are you guys speaking?

jeffrey

THAT'S A FARGIN' TREEECK QUESTION!!

You signin' binges...

doctorj

Boygabriel wrote: What language are you guys speaking?

Streetspeak. Allow me to translate:

"Look who's there! It's nasty old Mr Bear! Growl. Run, Mr Bull, Run!"

eggcream

supreme_ian wrote: ahahahah NO OIL in russia.. of course bush punk ass dont care.. ahahahah

ahahah WRONG. There is oil in Russia. Helps to know what you're talking about before you open your mouth.

alafairnadia

Carnivore wrote: [quote=doctorj]Same strategy the Javanese have been using to quell unrest in the outlying provinces of Indonesia since Dutch decolonization.

Or the Israelis have been using with their settlements in Palestinian territories. Or the Chinese have been doing in Western China and Tibet.

or that the saudis are using in turkey to push a religious agenda. if you see a woman in a burka in turkey, she´s saudi.

doctorj

It does seem like oil prices reacted upwards to the threat to the pipeline around the 11th-12th, but it was brief and over quickly.
http://news.bbc.co.uk/2/hi/business/7553461.stm
BBC radio was running a longer story last night on the subject but I haven't tracked it down. But essentially, at only 1% of world supply and without major damage, the market decided fairly quickly it wasn't a big issue, which seems to have been the right call in hindsight.

Although, Bloomberg is leading with this today:
Oil Rises More Than $3 on U.S.-Russia Tensions, Dollar Weakness
http://www.bloomberg.com/apps/news?pid=20601087&sid=axCEv144aoL4&refer=home

MOD

jeffrey

doctorj wrote: But essentially, at only 1% of world supply and without major damage, the market decided fairly quickly it wasn't a big issue, which seems to have been the right call in hindsight.

Although, Bloomberg is leading with this today:
Oil Rises More Than $3 on U.S.-Russia Tensions, Dollar Weakness
http://www.bloomberg.com/apps/news?pid=20601087&sid=axCEv144aoL4&refer=home

Yep, it appears to have gone to the next stage of proxy fighting (our missiles in Poland, Hungary etc. vs their missiles in and support for Syria).

This is the "CHANGE" McCain has been waiting for.
(hot-headed provocation and mutual escalation back to Cold War so he can roll back the clock and pretend he is Reagan)