Just a thought on crude and inflation

Discussion in 'Trading' started by scriabinop23, Apr 16, 2008.

  1. This will be fascinating to see crude play out. Remember, the justification of crude as an inflation hedge being useful hinges not only on monetary supply (which some facets have been contractionary as of late), but on the predication of continued (cost push) inflation from ... oil itself.

    So to get the CPI rate up even higher, we're going to need to ramp up crude significantly higher. Will buyers be willing to take it from 115 to 140 to create a justifiable hedge? The airlines' trouble (as well as lower gasoline demand) should be a symbol that this isn't sustainable as a viable inflation hedge (proxy to the 30 year bond) or a speculative play.

    Thats my thought at least...
  2. Petroleum Supply Ending % 101 Days %
    (Thousand Barrels per Day) 04/11/08 04/11/07 Change 2008 2007 Chg
    Net Imports (Incl SPR) (2) 9,217 10,249

    All that demand? And yet prices go higher?

    1M b/d lower demand.