Cramer calling for 56 dollar oil

[aaltoippp]

i kinda agree with englishman on this one. i love Cramer, but when i saw him say it this afternoon, at first i thought he was being sarcastic. he made a good point about how this move was more about the "iran premium" coming out as opposed to slowing economy or supply/demand issues. but i dont think iran could be more than $10, so the rest of the decline will be sector rotation. i do think that 65 is pretty solid.. interesting how when that was challenged, reports started circling about refinery problems, and we got that unleaded contract to spike. you must evaluate your time frame to take advantage of this opportunity.

OT- was it me or was Barnett super stiff with Cramer? no chemistry. i know it was the first new one, but you think they'd at least practice/chat a little beforehand. anyhow, good luck all!

[A45T]

Anything's possible, but sooner or later the realization that OPEC is pumping at max capacity is going to sink in; any disruption whatsoever and there will be no more to make up the difference.

I didn't see Cramer making that call, however I wonder if he delved into the refining margins?, because that is what truly matters for the oil stocks, and they are still making money, just not record amounts at the moment. Anyone that doesn't still see growth in oil isn't looking at the long term big picture,imo.

I think the oil stocks are currently "broken" as Cramer likes to say, however I doubt the companies behind them are.

[9dRWFpl2Yf]

His thoughts on oil are entirely based on that day's price. 3 weeks ago when it was $3.25 here, he said oil could see $90+ per barrel...

And now it's $2.75 and $56 a barrell? C'mon, Jim...

I'm long COP. And you know what? I really am not afraid right now, because when I drive, I still see the occasional car that runs on gas...

If Iran/Pakistan/Israel/Saudi Arabia/choose your mid-eastern unstable country so much as mentions they read a book about how a nuke was built, I expect gas to rise.

[4byra6ka_tub]

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There is no a big problem with oil in general except increasing demand from China but I think is is quite under control of the Chinese government. Russia and OPEC are pretty much stable in providing oil supply. IRAN is not a problem because I don't think that there is a real chance that US starts a war. Once demand and supply are relatively stable so why should prices go up ? I am considering investing in Dow Chemicals ?€“ biggest chemical-polymer producer in the country. It may have revenue decline but it already shut down some unprofitable plants and also DOW will benefit the most of declining oil prices because crude oil is its main row material.
So this stock might slowly grow.
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[1SNl47gxHs]

Demand has to go up, while supply is (arguably I suppose) limited. People seem to confuse "slowing growth" with negative growth...growth is growth, it means demand is increasing albeit slower than earlier in the year. China is raising interest rates in order to try and contain growth. Oil companies are spending big money on wells like Jack 2 because of the ROI based on high prices, they simply cannot afford to pull the oil out of that field at sub-$60 prices, it is going to cost them billions.

OPEC is pretty good at making money, agreed? They are not concerned at this juncture and believe this to be a perfectly normal cyclical between Summer and Winter, additionaly they have stated that they will reconsider quota's before the next scheduled meeting in December if prices fall too much. How much is too much? I won't pretend to know the answer, but I doubt they want to be pumping at max capacity and getting paid 25%+ less for their efforts.

[admin]

Let's say Dow chemicals starts selling more product, then they make more product, therefore they use more raw material...oil, therefore they help increase demand. It's unavoidable, think about how many products contain some derivitive of oil (and they all need to be transported by oil consuming machines), the worldwide manufacturing has to be reduced significantly along with a reduction in gasoline/diesel fueled vehicles to stem the demand for oil and I just don't see that happening.

One would also have to be highly optimistic to think that the speculators have abandoned oil, there never has been and likely never will be global peace, the mid-east is far from being peaceful, it only taks one Islamic extremist to set the World on it's ear.

If OPEC was currently operating at say 80% and prices had dropped as they have, then I would think oil is really not in demand at all, but this pullback is happening on the best possible news you could hope for....all at the same time (low tropical activity, Iran fear removed, Hezbollah cease fire, summer driving season ended) if all of these events occured simultaenously I doubt the increase would top out out at the current record of $78.

Just my long-winded opinion to your questionhttp://onlinetradersforum.com/styles/default/xenforo/clear.png