Posted on 05/14/2009 12:57:18 PM PDT by Kartographer
Crude oil has bounced since February to almost $60 a barrel despite worsening fundamental data. Commercial inventories are overflowing, having risen in the first quarter, a period when they usually drop. Moreover, as oil prices have risen, OPEC's discipline has started cracking, with the cartel increasing output last month for the first time since August.
(Excerpt) Read more at online.wsj.com ...
Will all the excess liquidity, due to the Fed, settle on commodities? Inflation in a deflationary spiral?
I don’t see the fundamentals in place to hold the price of crude up even if the dollar is beginning to slip. This is market manipulation.
When O When is Obama going to get behind domestic production?
Soros has just bought a big stake in domestic oil and gas exploration and development ... guess the Kenyan has to let him make some money on that before he OK's more drilling and refining.
the fact that yesterday’s retail numbers for April indicated a 2 1/2% decline in gasoline sales would seem to support your position.
It’s not so much a rise in crude, but a drop in the value of the dollar.
I would say this is oil producing countries holding off on selling oil until prices rise or their savings (historical budget surpluses) dwindle to zero. Since they had a few fat years, my guess is that they can hold out for a couple of years, at most. Whatever their endurance, prices will collapse once they run out of cash. Russia is doing the same thing with respect to its diamond production - holding off on sales until prices recover. This strategy is reliant on a quick economic recovery and demand increases. If the economy doesn't pick up quickly, and they run out of cash, they will have to dump their inventories at whatever they can sell them for. It's a big gamble, and one that will end in tears for them.
Where does the Memorial Day annual rate hike play into this scenario?
What about historical price increases at the start of the annual driving season coming into play?
Yup. Oil (as price in silver) has not gone up these past two weeks. Nor do I think oil has gone up, much, in Canadian dollars.
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