Thursday, May 28, 2015

No one knows what's real.

I think it is really distressing that no one seems to know what is really going on in the economy. I admit, I'm not even sure. I'm just guessing like everyone else.'s really troubling that the data has been so contorted that no one believes any of the data resulting in this article about how The Oil Glut is Not real.

"I could be wrong, and may have missed something, but what I heard was merely that one or two firms, when asked at what price they would start adding rigs, responded by saying roughly around $70 per barrel. But they did not say that the spigot would be turned on by a huge amount. The market appears to buy into the perception that supply greatly exceeds demand. But I disagree with that analysis completely.

Capital spending was, lo and behold, also dramatically revised higher in previous months, fully consistent with the pending “revised” quarterly GDP data for the first half of this year. With such blatant data manipulation going on, why shouldn’t we question the extent of stated “glut” in oil?"

(I think) his theory is that all the revisions to GDP are so manipulated that you can't believe any of the data even the report of an oil glut.

I always start from the position that maybe this guy is right. He gets paid to try and be right. I don't. Still, you can make some assumptions based on what is happening. For instance this other article that came out this morning.

Oil storage is so expensive it could derail the oil recovery.

"Oil tankers have become super expensive — a sign drillers are flooding the market once more, according to a report Wednesday by Bloomberg's Naomi Christie and Bill Lehane.
The daily rate for oil supertankers is at its highest level for this time of year since 2008, Bloomberg reported.

Benchmark charter rates surged 57% in the two weeks leading up to last Wednesday because of a sudden rise in demand."

This makes it seem like the glut is real, because why would they raise they rates if they weren't running out of space? Normally you do that because you don't have as much of something to give.

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