I must have been napping when you all think you heard the fat lady sing. Don't be confused by a temporary firming of the dollar. Price is solidly in the middle of its long term channel.
Those of you old enough to remember the Kingston Trio will recognize my long term bullish bias on commodities from the early influence in my life of their "Merry Minuet": "Theyâre rioting in Africa Theyâre starving in Spain Thereâs hurricanes in Florida And Texas needs rain! The whole world is festering With unhappy souls. The French hate the Germans The Germans hate the Poles. Italians hate Yugoslavs South Africans hate the Dutch. And I don't like anybody very much. Theyâre rioting in Africa Thereâs strife in Iran. What nature doesnât so to us Will be done by our fellow man!
You're crazy. This is just the fear premium selling off due to the (temporary?) ceasefire and better-than-initially-expected news on BP. None of the original fundamental issues have been resolved, i.e. Nigeria, Iran, hurricanes. Gulf has yet to see a hurricane, rebels in Nigeria have been kidnapping of late, but have not staged a major attack in weeks, are we due for one? Let's not even talk about Iran. They will not comply with the Sec. Council resolution. What's next, sanctions and then military action? Oil's going back up. This is a buying opp... don't know when it reverses though. Rhetoric surrounding the Iran situation will send it back up if a hurricane or Nigerian attack doesn't first... this is all ignoring inventory numbers, which could surprise in either direction
Did anyone see the 60 minutes interview with Ahmadinejad this week? Forget hurricanes and Nigeria ... this is big. The guy is sharp too -- I wouldn't trust him due to some of his anti-semetic rhetoric, but I can't deny he has a little more going on up there than perhaps Bush. The Israel-Lebanon truce has had probably zero impact on oil prices. I attribute all of the latest drop to the BP deal. Oil was on its way down to mid-73s right before the BP shutdown, so its where it should be. Oil will either be at $60 or $95 one month from now. This *all* hinges on Iran (and good pal Hugo Chavez in Venezuela). And if Iran stalls UN yet another month, oil will be at $70.
FYI we are maintaining the short oil positions here averaged @ 75.50. expecting < = 70 very soon..... surf
Glad to be crazy. But tell us something new. All of the above has been priced in a long time ago. For oil to go up more than a few bucks you'd need a real war (with Iran), a huge huge (natural) catastrophe, or something else genuinely surprising. Otherwise it just seems to be grinding slowly down.
Agree with surf. Think cyclical. Oil, Gold, Copper heading for a deep down move lasting quite some time. --bull
This is actually not true. Since demand and supply are both "near capacity" any fluctuation from either side of the demand/supply equation will have an effect and be reflected in the price. Meaning, there's no slack in the system. In addition, there are alot of oil events that move the price but are not referenced for "oil news soundbites". The stuff most easily identifiable is used by the media to quickly explain price movements, but the media doesn't talk about all of the rigs and fields that come offline, go online, spills, small discoveries, etc. Oil is a global market and so large that its behavior is much more easily communicated to the public if they slap some "big easy stories" on its face. A major factor in the decline in the price of oil is the downward pressure on all asset levels, especially commodities, as a global slowdown picure begins to creep into the financial media and become more of a readily accepted reality. We're in a frightening situation where the coming growth slowdown could lead to very low commodity prices across the board, OR, higher than expected inflation will prop up commodity prices, further exascerbating the growth slowdown, with prices not necessarily coming down in reaction to the lower demand due to lagged inflationary pressures