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By Robert Rapier on Oct 30, 2007 with no responses

Goldman Says `Take Profits’

Tags: investing

A few months ago, an analyst at a brokerage firm wrote to me and said that they had actually used some of my essays as the basis of advising their clients. That was flattering, but it also made me feel somewhat uneasy. I don’t mind telling you what I think is going to happen, but I don’t want to be responsible for anyone losing money if I am wrong. Anyway, that particular brokerage had used some of my essays to steer their clients away from ethanol stocks, and those stocks are in fact down significantly since then. So, that worked out well. The analysts probably got paid a nice bonus and the clients were happy. I couldn’t help but notice that my check was lost in the mail, but such is life. But I didn’t end up entirely empty-handed. I probably pulled in $0.40 in ad revenue that day. :-)

Anyway, on a typical day, I get quite a cross-section of brokerage firms, banks, government agencies, insurance firms, and hedge funds that stop by. There have been 30 visitors from New York City – primarily financially related – in the past couple of hours. There have also been 18 visitors today from Washington D.C. – primarily government affiliated. I won’t name names (except for one), but the Site Meter at the bottom of the page gives some information about the last 100 visitors. I also have a site meter that is not visible, and it gives me much greater detail about the last 500 visitors. For instance, I can tell who is reading what, and this can give me quite a bit of insight into what people are after. And it is clear from the paths that some financial visitors are doing research.

One I will name is Goldman Sachs. I get one or more visitors from there on pretty much a daily basis. Thank goodness I finally got through to them:

Goldman Says `Take Profits’ After Crude Hits Record

Oct. 30 (Bloomberg) — Goldman Sachs Group Inc., the bank that said in July oil may reach $95 a barrel, told clients it was “time to take profits” after crude rose to a record $93.80 in New York yesterday.

“We are now more cautious on the near-term upside potential for oil prices,” analysts including Jeffrey Currie in London said in the bank’s Energy Weekly today. “We are not trying to call a top here, just take profits.”

Goldman said it was closing its long positions in New York oil futures. Oil has gained 51 percent this year as hedge funds and other large speculators increased bets on rising prices. Net-long positions in New York crude futures in the week ended Aug. 3 jumped to the highest in more than a decade.

Crude oil for December delivery fell $3.15, or 3.4 percent, to settle at $90.38 a barrel on the New York Mercantile Exchange. The price for March delivery was at $87.99 a barrel and at $82.92 for December next year.

Goldman’s recommendation “might be a bit early,” especially if colder weather boosts demand during the next two months, said Francisco Blanch, a London-based analyst at Merrill Lynch & Co. Blanch predicts oil will average $80 a barrel for the three months through December, and that prices are more likely to reach $100 soon than $60.

OK, I will name one more name. Someone at Merrill Lynch is also a very regular visitor on here. And the official position of Merrill Lynch is still for $100 oil. (Time to bail, Merrill).

Of course I am joking about influencing Goldman. For all I know, it’s one of their receptionists just browsing on their lunch break. I just thought it was interesting that they – having been really bullish on oil for a long time – also felt like the market had gotten ahead of itself.

On the other hand, if I am now the de facto chief energy analyst for Goldman, I will look for my bonus check in the mail. :-)

One other thing I sometimes get a kick out of is seeing the keywords that have directed people here. You sometimes wonder, “What were they thinking?” Here is a sampling from today (from various search engines):

rapier vs staff
opec no longer pegs oil to dollar
are there any harmful wastes produced by fossil fuel
doug macintyre eia doe
upstream downstream oil price
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who killed electric car engineers
why is ethanol stock going down
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bush texas ranch house size
why are gas prices rising? 2007
if a barrel of crude goes up to $100 what will a gallon of gas cost?
chuck schumer’s views on energy
robert rapier doesn’t sleep
how much energy is obtain in alcohol fumes?
congressional food versus fuel
probability of die-off scenarios peak oil
personal investing to combat gas prices
bibliography on vinod khosla

But the funniest one I ever heard came from another energy blogger, who said someone was directed to his blog by “What does it mean when my poop is green?” LOL! I didn’t ask.