Is the price down because the US demand for oil is waning or because the market knows that Saudi Arabia will not be sucked into the Jasmine Revolution? If supply and demand really does affect the oil price, why the Syrian protest is not sending oil higher is beyond me. I'm beginning to think the supply/demand equation thrown around by the pundits has no relevance on oil prices. Zip, nada, zilch!
Just me Schizo, but I think the inventory numbers tomorrow will give us a correct and updated piece to the supply and demand puzzle.
I say it's down primarily because of fear of US fiscal austerity. Premature spending cuts are deadly in a balance sheet recession (see Japan, Great Depression). The US and especially China (which has a growing inflation problem though) held the economy on life support with big fiscal stimuli. I say even with further loose monetary policy (QE3, if coming) the oil market (and other commodities/ equities) will have a very hard time to hold its current levels (mainly just induced by financial entities leveraging up due to QEn) if the US goes the path of fiscal austerity. Though I think there could still be some more upside for oil in the very near future (sucker's move). The middle east by and large is not seen as hiding further unpleasant surprises, I think.
anyone listen to Lindsey Williams? he said an insider informed him that the price of oil is going to hit $200. Trade accordingly.
How many times have we seen the oil shoot up on higher supply and vice versa? The inventory number in my mind is merely a ruse to reinforce whatever macro events are taking place. What I find disturbing is how the lack of supply is always used to rationalize the rising oil price and the lower demand for falling price. It's the same old excuse. Time after time.
US API Crude Oil Inventories (Apr 8) W/W 1187K vs. Prev. - 2797K US API Cushing Crude OK Inventory (Apr 8) W/W -107K vs. Prev. 122 US API Distillate Inventory (Apr 8) W/W -3686K vs. Prev. -1031K US API Gasoline Inventories (Apr 8) W/W -4598K vs. Prev. 568K