At this point

Oil can't be stopped by the dollar.

 

crude is going up!! stagflation is coming!

 

Not so.

Coming across my screen late last night: World Band issued first yuan Bonds in Hong Kong. Second news that came across my bloomberg was, Yuan to go heads to heads with US DOLLAR in global trade.

Oil is not going to survive at 100 plus for long as the dollar starts to compete with the Yuan. This is an on going task and recently being pushed by Asia. I deal with Asia and the rest of the world. What I am hearing is that the US DOLLAR is not being dumped but they want competition for exchange. OIL, Transportation of Goods, Private Equity, etc all want competition. Nobody is anti dollar but they are lossing confidence fast.

We may see some serious inflation on our shores but the very inflation that we exported to the rest of the world via QE1/QE2 is being sent back to US, by loosing the Dollars hold world wide.

Once again, they GLobal Community is not dumping dollars but they are looking for a way to move out of the dollar as it devalues, into to other currency. They want the option. Which, IMHO is fair.

So as the world moves away from the dollar and Oil is traded in other currency, the less pressure the weak dollar (inflation) has on oil.

The only way oil will sustain such levels is with a full turn-around in demand.

Currently...I'm watching oil, looking to short. Time isn't right yet. March or April is what I'm thinking. For many reasons that I can not post. Not trying to predict a move for anyone else other than myself, based on research and my day to day activities in the Private Equity world.

 

Sounds good to me. I cannot see oil holding $100 in this environment.

 

What about $110 or $120? :eek:

 

if the dollar starts trading above 90 than talk to me then but i dont see the dollar gaining any momentum for a while considering monetary and fiscal policy in the U.S.
Even with a strong dollar that means we can go to the middle east and by more oil ergo shrinking supply.

The nominal value of oil may be volatile in the short run but the real value of oil is where it is today because some outliers have already been reached (IEeak Oil in America).

 

Put it this way, if it gets there (110 to 120) which i don't think it will, demand destruction will drive it right back down. The economy is still too weak to support it. That is my worthless opinion.