Right. Take delivery. Store the oil. Deliver the oil you stored. Pay the storage people and the interest on any money you may have borrowed to finance the whole thing. The rest is your profits.

Please watch Dr. Jane Lubchenkos presentation to House Select Co;

"OCEANS & CLIMATE CHANGE: Dr. Jane Lubchenko"

http://www.youtube.com/watch?v=LG5M-ziD_Q0

It's the most ominous news since the report of arctic ice melting 30 years ahead of schedule. Looks like even us old farts will live to see AGW predictions realized. (and then some)

If our species was sane by any reasonable criteria, this story would trump all others.

Methane Leaking Into Arctic Ocean

Gavin and company at realclimate are NOT panicing about this subject. They think the methane releases will not be that large or rapid to be a major threat. That doesn't mean that it isn't yet another incremental increase in greenhouse gases, just that they don't think a runaway process is at all likely.

Go to the energybulletin.net today and read the article about oil pricing. No one has a clue; so even if some people got it right I think they just got lucky. After all, this is basically just a binary decision.

Regardless, I wouldn't bet the farm and certainly wouldn't have all my bags in any one basket, including oil. But if you have the time, I have to believe this oil market will recover within the next few years and, when it does, it will be with a vengeance. We were in an upward mania before and now it has reversed. Mania is a feature of this market and it will return on the upside.

Yes, I've done worse than you for the same reasons. Trying to time a system this complex, even to work out the sequence of events in advance, is tough if not impossible.

Far as guessing goes, then, my guess is that things will be volatile, not stable. Holding some funds in cash, while also putting 5-10% of assets into long out-of-the-money crude and gold calls, appeals to me.

I know this site is NOT for investment purposes; it's so much more useful than that. But...I wonder if it means anything that the DTO (double short)10 day average volume is only 300k shares per day and the DXO (double long) average volume is 20 million. Just seems like a huge difference. Might explain some of the volitility at least in these specific etf's.

Guess it makes no nevermind. I am going to get back to what I was doing...hording the sweet god send that are candy canes by the truckload in the attic in case this is the last year I can get them.

Learn trading signals. They're very easy to use--the only difficulty is in having the discipline to use them. You can get by with a single book: Timing Techniques for Commodities Futures Markets, by Colin Alexander. Open an account at Optionsxpress.com and use the Flexcharts. If you want to get really expert at trading, I can recommend some more books.

We did get a glimmer of a possible trend reversal on Friday. It could peter out, we'll see. It's not a buy signal in and of itself.

If this is for your retirement, and you've been hanging on since much higher prices, I would not sell now.

If you've just bought, be sure you know how to set stops, or are prepared to ride out significant fluctuations.

There is no big mystery to trading. I personally know some real idiots who are very successful at it. I'd estimate it takes about 1/10th the skill of poker. Again, the difficulty for most people is that it requires you to overcome risk aversion tendencies that are hard-wired in your brain.

sounds like you are my long lost twin

i had very similar reasoning and took similar actions - except i bought gold and silver only
(not the companies, just the metal ETFs) as oil was too expensive (i thought) back in 2005. I still have the glod, but i have cut down significantly on the silver. I realized the silver bugs are eternally waiting for another Hunt bros incident.
and they will wait forever

however, not to be outdone, as i also listened to Simmons and Hirsch (becuase i like to invest till it hurts) i discovered the oil 200% up ETF UCO and bought in in the mid 40's. bought in a lot
so now i am hurting, and waiting, and saying "never again"

i guess i am just a typical small investor - i think i am smart, well informed, rational. which means i am the perfect lemming

I always wondered how it would feel to find my Doppelgänger - maybe it proves that misery loves company! Our stock investing experience is identical.

I'm down over 50% on commodities and alternate energy. However, right or wrong, I'm not going to sell at this time. My guess is that there will be a general economy recovery of sorts that will restore prices in these sectors to a fair degree. However, it also seems likely that our collective failure to make fundamental changes in energy and climate policies-behavior will keep this recovery short lived and ultimately result in another crash - maybe worse than this one.

Then the big question is how to recognize a reasonable point to gracefully exit some of our more vunerable positions. And further, what to do with any cash we raise? Holding cash may be just as dumb as hanging onto oil stocks that were taking a nose dive. Buying cases of pork and beans only makes sense if we eat them before the expiration date. And, I don't really like pork and beans.

The old concept of ‘stored value’ lent out at very low or reasonable interest, expected to return steady revenue, is dead.

Instead security is sought by playing the markets and the players get peeled, the whole ‘market’ is designed, in a way, just for that purpose. To pull in the punters. Even Madoff comes to a bad end.

The slickest and smartest and most pointedly the well-connected can continue to reap the last drops of the squeezed-out lemon.

Speculation, betting in the casino, Ponzi schemes and other frauds of the most primitive type, are part of the actions that led to the present problems in the first place. We now see that speculation in commodities was a reaction to a downturn of a massive type.

No moral point, or condemnation, one has to be pragmatic.

But on a grander scale - for the good of all. ;)

These are wet behind the ears kids who don't know diddle about human psychology and would laugh in derision if someone suggested that we are a herd animal subject to fits of greed and panic.

LOL ! Derision can be evoked many ways.

I recently graduated from a community college trade program. I am as old/older than the instructors - who had much derision heaped on them by the majority, which were 20-somethings. The herd dynamics was also evident is other ways specific to the learning environment.

"Simmons has lost it. He has become something of a laughing stock and I think he knows his credibility is gone."

well, if you feel that way, you should probably short crude oil and all the oil companies from xom to tag oil inc.

The show isn't over, LJR, Simmons could still be correct on many of his calls. And if he is sounding less calm than Hirsch, I for one can't really fault him. He gives speech after speech pointing out that we have a real problem and yet...nothing happens. Mostly he probably hears, "Why that's very interesting. Did you like the lunch that was served today?" which is one response I got at a Rotary Club meeting.

From personal experience, it is no fun at all being the bearer of this particular news. It mostly just bounces off of people and that can be really frustrating after a while.

I don't buy the "demand is falling" bull.

Oil's price manipulation has nothing to do with supply and demand.

My condo furnace is still heating my condo the same as it has since the late forties. (I like living in buildings older than I am. [But the insulation is definitely not 'state-of-the-art"])

My need for heat is not decreasing in the least, (The but bill for it has been going up and down and is giving the entire board the extreme jitters. [Fuel is our biggest cost by a large margin.])

Jersey City is saturated as far as car traffic goes. Every parking spot for blocks around is filled. (The financial meltdown has not altered the commuting patterns in the least. If you have a job you still go to it. [But its now costing less than last summer{, for now.}])

The alleged percentages in consumption reduction are vanishingly small.

BUT the alleged feeling that we had been manipulated (read "had our wallets raped by the terminally greedy") is making far more of an impression on us than the vertiginous price drops.

I think that we have reached a watershed moment in the history of energy consumption.

We will push forward with alternative energy as a safety measure (a salve for our battered pockets) to get us the hell off the oil treadmill.

That it is good for the environment, for the species, for our energy independence as a nation, is fine and dandy but merely incidental.

People who have never even heard of "peak oil" (and that's the majority of the population [despite our years of screaming in the wilderness,]) are wanting to get off any energy treadmill and most every grid because "they just don't feel right."

The meltdown in the financial sector is just adding to the perceived malaise.

Since Joe Public can't run a bank, he can change his buying pattern and his consumption pattern. (Look for opportunities in localization and energy efficiency, in both products and services.)

What we have to do is exactly what we've been doing (creating an infrastructure for alternate energy,) and hope the public's malaise at living in "Hummer World" lasts long enough for them to "buy a Prius." (Sadly, the bankrupt American car makers may not have woken up in time.)

Once they have "bought the Prius", (Once they are left with a durable good which is a major expense but which doesn't require major expenditure to keep it operating,) we may look forward to breathing a sigh of relief(, and not coughing up a lungfull of phlegm when we do.)

Simmons has lost it. He has become something of a laughing stock and I think he knows his credibility is gone.

Personally I think Simmons is very brilliant, which is why he's made many millions over decades doing investment banking for the energy biz.

And I think anyone laughing at Simmons right now is either in high school or has a low IQ.

In addition, the markets sure don't share the view that Simmons is a laughing stock. The premiums speculators are getting for shorting future months are incredibly high--which means producers think Simmons is right. The market is saying that the people who know the most about energy market fundamentals don't want the price risk of selling future months at these prices. In fact, they are largely passing up the chance to lock in profits of over 11%. That's a strong bet on Simmons.

Comes down to computers. Computers model risk with facility. The incentive to treat uncertainty as risk is just too great, I fear.

This is one the great ironies. I work for a computer company that sold a lot of hardware to Wall St (and is now suffering as that market has tanked). It's clear to me that Wall St wouldn't be in the mess it is without high-speed computers to run all these crazy derivative algorithms.

Thanks for the reminder "public service announcement," Leanan.

Pretty color, too!

You're making him work on Christmas day?

That's it. You will be visited by three oil drum postings. Expect the first one at 01:00:00.0000+local_variation GMT.

The rest of you enjoy a hearty plum pudding and an extra lump of clean coal technology generated electricity.

Just log on all the earlier the next morning.

:>

Jon.

Dr. Jane's observation:

"Vested interests, then, often spin, cherry-pick and distort information. The result is what we have seen play out over the last decade in many different arenas. Decisions are made without good science, or science is seen as a weapon, not as useful knowledge. Now, this doesn’t serve anyone well."

Current reality: "Obama buys the biofuel hype" (from today's links above).

Next year:

"Last Gasps of Federal Dinosaurs Crush, Kill, Destroy Profoundly Local Microfauna - Newz @ 11:00:"

It is thought that 65% of traffic to India was down, while services to Singapore, Malaysia, Saudi Arabia, Egypt, Taiwan and Pakistan have also been severely affected.

Earlier this year, the same line was damaged in the same area - off the Egyptian coast - although only two lines were snapped then.

"We've lost three out of four lines. If the fourth cable breaks, we're looking at a total blackout in the Middle East," said Mr Wright.

"These three circuits account for 90% of the traffic and we're going to see more international phone calls dropping and a huge degradation in the quality of local internet," he added.

"Normally you would expect to see one major break per cable per year. With four you should have an insurance policy. For this to happen twice in one year, on the same cable, is a serious cause for concern."

That sounds very bad. Don't think you can really criticise the resilience though if you've lost 75% of your cables normally carrying 90% of traffic and Internet connectivity is still available - if degraded.

Anyone seen the USS Jimmy Carter recently? ;-)

The lack of resiliency can arguably be attributed to business practices. The underlying internet protocol (IP) is astoundingly resilient if the network lacks centralized choke-points. As in many complex systems, redundancy leads to robustness. Failure of single cable ought not to seriously affect the system. Ask your self, how many redundant, high capacity links exist between Europe an India? Is the traffic free to flow over those other links or is it constrained by business practices?

Now, consider what will happen if you reduce the redundancy in financial markets, or in the oil industry, or in an ecosystem. Everything looks fine until the predictably unpredictable happens (in a statistical sense) and the system collapses.

Sadly, redundancy in artificial systems is expensive and there is a financial incentive to eliminate it. Few pay attention to the increased risk of system collapse that arises from such optimizations.

I liked the photos in the essay and also the lighthearted fun style. However, Harajuku in Tokyo has a few popular narrow streets (Yamashita Dori is the most famous)but it borders on a huge boulevard packed with cars and Tokyo itself is generally a "hypertrophic city" filled with "supergigantic buildings" and there are even some ugly expressways, although OK they're not as big as the ones in the US.

A lot of the picturesque villages here are just for tourists. People would never think of living in one. Everyone likes to live with driveways and parking garages. So convenient! Until it's NOT!

It's nice to find someone out there who hates cars as much as I do. Thank you.

An invasion from outer space couldn't be as destructive as automobiles and hamburgers.

The "things" we need, like the truly effective infrastructure that will reduce energy consumption will cost money. Printing it into existence while refusing to monetize natural resources is crazy.

Great post as always, gregor. But, since I don't expect the government to get it right, I think it's better to print the money than not print it at this point, and build the roads and bridges, etc. even though I agree the things they are monetizing are wrong.

At this point, I'd vote to pay people to dig ditches and then fill them in again (which is about the equivalent of making ethanol). At least then you have a prayer of bottom-up solutions to the whole mess.

Rarely have I seen an expression of opinions on a host of subjects that is so close to my own. I didn't know I had a long last clone! So I'm sure Gregor has discovered how unpopular someone who opposes, highspeed rail, and supports more drilling, funds to be used for the transition to the postoil era. It's kind of like the viscious attacks from climate skeptics remarked about in one of Leeann's other Drumbeat stories today.

California has some structural problems. Actually just a few words on a piece of paper, but the unwriting of them is verboten. The first of these is the whole election proposition process. This leads towards government by the lowest common denominator, with many voters not even knowing about many propositions until they enter the voting both. Sexy sounding things, like high speed rail, which require numeracy to recognize as having costs far in excess of benefits can sail right through. Secondly, the state constitution requires a 66% majority to raise taxes of any sort, which means it is a long term near impossibility to raise taxes ever, leaving the state with a longstanding, and increasingly dire budget situation.

Well, the Belgian govt falls on a regular basis, as the Italian one does. No really news actually.

Maybe a website along the lines of f***ed-company.com, the Y2K era site documenting the end of the tech bubble. Or ml-implode.com now.

country-fu.cx

Some like "Zimbabwe" should fall.

Mugabe should be taken out the back and shown his people's high regard in the same way that Nicolae Ceauşescu was shown.

I too love my ductless heat pump. I wish I had sized it larger, but that's my fault and not the fault of the manufacturer or the technology.

As Tom Brokaw said, the winner of the presidential election should have demanded a recount.

Stock up on powdered milk and potassium iodide tablets.

vile sack ? he didnt do anything of note as governor and maybe we will be lucky and he won't do anything now either.

i have no idea why he thought he could be president. wooden al was a fricken human dynamo in comparison.

More distortion from X.

The real issues are: what else could be done with the oil, natural gas and coal that are currently misallocated into the corn ethanol production process, and what else could be done with the corn or the land on which the corn is grown.

According to independent analysts, more energy is consumed by the corn ethanol boondoggle than is available in the ethanol produced; a few analysts tied to the ethanol industry have conjured up a small amount of net energy from the process, but even if their dubious logic is accepted, the amount of net energy compares poorly to the gains availble from other uses to which the energy inputs could be put.

Look for example at the energy produced for the rest of the economy by Paul in Halifax (upthread) by investing in building insulation and an air to air heat exchanger. His effort required energy, but has gained a recurring payback, not only for him but for every other person in the world now and into the future. Or think of the large savings in liquid energy when electricity is used to move people and goods on steel rails.

The land, of course, can be used for food production now; or it could be left idle to allow it to recover from decades of abusive industrial agricultural so that it can serve peoples' nutritional needs in the future.

Sorry Bob,

But I bet if you added up all the rooms in TIGER WOODS' numerous mansions, it would be about the same size. And you keep waiting for him to turn in his putter for a hoe, to dig up one of his namesake golf courses and grow organic veggies...

This, as Americans face their first of many dark dark Christmas's. The "1st" world is no different, we just are less smart enough to call him a hero, or an idol, or a role model, while in Zimbabwe, I'm sure they don't call this guy at all.

Don't take it personally, but you'd have to be dumber than yeast to think TIGER is going to ever do anything worthwhile besides give himself the requisite tax write-off funding some golf camp for kids.

Robert,
I am not sure why you would be more nervous about Peter Newman's vision of future cities than the doomer visions of suburban collapse? Perhaps you are a renter!

Thxs for the link--I saw all 3 parts in the series. Too bad we lost that initial momentum that we had jumpstarted so long ago.