rather than pick out individual stocks to trade, it can often be worthwhile to trade the indices themselves, especially in times of high volatility.

for those so inclined, i attach below charts for FTSE and FTSE 250, though one might equally be tempted to trade Dow or S&P, which is significantly broader in its coverage, or even NASDAQ

for ease of reading, i have attached 1 year and 3 month charts in each instance

Thinking about winter demand. Presumably much of it was paid for in the Summer as the larger energy companies would need to have a guaranteed supply. I guess that would mean that any oil demand/price rise might be equally lagged unless the winter is worse than expected. Just a thought.

Strawbs.

NYMEX TRADING
I have just spoken to IG on this score .... they will offer $2.50 per point - i.e. for every $1.00 oil moves, your profit/loss is $250.
It works against monthly contracts - like a traditional traded option - so the underlying price will vary.
Risk is still quite high, but it's worth investigation for those of that bent

I read somewhere a while back that utilities bought forward Jan.09 at equiv $110 crude though that is only from memory which isn't what it was...

Long dax short ftse pairs trade less than 350 points between them!Cynic I can only see $5 on ig for wti/brent

you are technically right, but i spoke to my m8 there and they will do a half mini-contract .... for me at least!

Does his name start with a 'B' by any chance?

no ..... i know a lot of the guys on the CFD side, but none whose name starts with B - lol!

I just rang them and they would only give $5, you must have good mates there! I shall stick with Gft spreadbetting as $5 is a bit racy with $2000 margin requirement and the currency conversion rigmarole!

you clearly don't have the right effluence!

cynic sorry we hit a nerve with you finding oil a sensitive subject. We shall wait and see whether Goldman ($175) or Merrill ($25) turn out to be right. What is obvious is that demand is going to fall rapidly so opec reducing production may have little or no impact as non opec producers will continue to pump as long as they are making a profit. All producers dependant on oil exports to support their national economies will continue to produce as they need the cash but they most certainly will try to reduce the cost of production and development. By the way the cost of production in Saudi is far less than $45 per barel according to a source we know it is nearer $10.

effluence? :-)

no nerve hit with me ..... my own view is that the fall is every bit as speculative as was the rise ..... and your source in saudi is talking balls or he isn't answering the Q you think you asked ..... by the way, how do you think (say) saudi will reduce the cost of production and development so that it will actually have an impact on the overall price?

btw, my own view (again!) is that the "natural" price of US light crude (aka nymex) is +/-$100

cynic you answered your own question in thread 3632 in reply to strawbs.

i re-read and saw no contradiction

The cost of production includes investment in new supply, drilling, etc. If you cancel that investment, then the cost of production comes down. If you don't need the supply, you don't need the investment. I believe that's what happened after the last oil shock. Of course that just means when demand picks up, the same supply side issues appear, and the price is squeezed upwards. You probably need to consider cost volumes too. e.g. It might be barely profitable to sell 80 million barrels a day at $x, but unprofitable to sell 79.9 million at the same cost.

I don't have a clue what the true value is, but I suspect it's dynamic relative to demand. The figure may also be different depending on whom you talk to. One producer may have spent a significant sum on producing from a new well and need $75 oil to break even, another with a mature field may only need $10 oil. The market will adjust higher, or the more expensive producer will go out of business. That's capitalism!

Strawbs.

i think you will find that saudi (and prob the others too) farm out their drilling etc to the likes of halliburton, schlumberger and BJ ..... rest assured that these guys do not invest in new kit unless they have to ..... in fact, to save "real" cost these guys in turn outsource some of the disposables that they need - e.g. HCL for fraccing and the procurement and transport for same

i would lay no claim whatsoever to being an economist or even an economic historian, but i am sure they would not agree with you overall

and while writing that, am glad to note that my Dow short opened this morning has borne fruit, though not unexpectedly

Well I'm not an economist either, although I do read a lot about economic, stock market history etc. I'm certainly no expert, and generally economist disagree just as much as any other type of professional. You have to weigh up the evidence and draw your own conclusions.

It doesn't matter who does the work on an oil field, just as it doesn't matter who does the work on anything. If they're not cost efficent in the market (whatever it may be), someone will do the work for less, or they'll cut staff, cut investment, or go out of business. Classic deflationary spiral ..... but that's probably an argument for another day.

In my opinion.

Strawbs.

indeed ..... in fact, as i wrote before, i think the "natural" level for light crude is now about $100.00, so i don't believe, let alone trust, either pundit!

Remember. It's not what you think that's profitable. It's what the markets think. But if you get there first and they catch up, then that's OK. :-)

Strawbs.