Hollywoods post is dead on. As for the media over-reporting it, they need to something to talk about. Another perspective Art Smith in an interview in Barron's this week: "Oil really isn't expensive; it's just that we've been lulled into thinking so after 15 years of $20 oil. A $40 barrel in 1980 would translate into $80 or $90 today ... For some reason, Americans believe it's their God-given right to have cheap gasoline forever. On a cents-per-mile-traveled basis, gasoline is still as cheap as it has ever been -- under 10 cents a mile."
I know what you mean.Ive been going over this for a couple months with my room mate.We come away scratching our heads,because it seems so obvious.If you watched cnbc monday morning,they had a guest from the investment research institute out of Montana,and he basically made the same point.Thats the first time Ive heard anyone make this point on the tube or in the press,and I do more reasearch than anyone else I know who is actively in the markets by far.Including some very unusual information sources, which I have found to be just as valuable as the info in the press.In social gatherings Ive made this point on two occassions to people whose only knowledge of the market is lthe amount of deposits they make to their 401k.At first they give you this puzzled look,which in a matter of minutes,if not seconds that look turns to a worried look, which morfs into look of anger.Realization sets in.The return comment , "oh shit,we're going to get screwed again".As far as why,without going into alot of speculation,lets just say sentiment is decidedly bullish longterm, no matter how misguided.goodluck
I think Japan's MoF has concluded that higher energy costs are the greater threat to the economy rather than weakening exports, so they will allow for stronger yen. Japan is second largest importer of crude with virtually no domestic resource.
=============================== Airlines are a tough but needed business; some hedge & some pass along oil $ increases to customers. The reason I entilled 1/2 of my news ''reduced demand''; is because i ''reduced demand '' at local gas station by driving her car more. Her car uses 25% or so less than mine; luv the free enterprize system even though many in news media do not.
Actually, China is the second largest importer/consumer of oil - they recently surpassed Japan, and this is a heavy contributor to the increase in prices of late as reported on Bloomberg TV yesterday. They're also the largest consumer of copper - because of the blooming industry over there.
it doesn't matter whether opec uses US dollars or eurodollars, they're both freely convertible. what does matter to US consumers is that the continuing weak dollar policy of Brazilian School of Economics Bushistas will continue to make oil look more expensive over here. meanwhile in Euroland, a barrel of oil is exact same price it was 2 years ago.
It does matter immensely to the US if oil is not bought in US dollars because the demand for US dollars will be severely impacted along with the status of the US dollar as a reserve currency. Without adequate demand for US dollars there would be no party in the US markets and no (phony) recovery. I wonder who out there still believes that the US invaded Iraq because of WMD.
noticed an overnight spike of 10 cents a gallon at the local station this morning. if the bushies think they can spin this away then they are living in teletubby-ville.