Re: OIL AGAIN!
It's a bit like the US Fed, they (the oil producers) have lost control of the situation. The oil price is determined by the specs now as the fundamentals (at this point in time) do not align with price momentum. When the specs hit the exits it will be breathtaking. Until then.......great trading
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PS the oil stocks still lagging the action, still?? What gives? WPL a great day trade these days.
I don't think the speculators have much control over oil prices at moment.
Furthermore, I believe the oil producers (larger nations and the multinationals) know exactly what they are doing, and that they are using the "fundamentals" to keep prices bidding upwards.
Why so?
The US has no option: It
must buy oil because the wheels of its economy will fall off if it does not have enough.
To maintain its oil stocks it needs to keep outbidding other nations, who are also desperate for oil, but literally can't afford to outbid the US. Oil is a sellers market; a producers market, and a speculators playground no more or less than it has been for years.
Yet from a speculators point of view, where black box trading has provided a degree of "predictability", there is now considerable risk as oil keeps moving into uncharted waters.
I won't try to temp an oil price meltdown by saying it won't happen. It surely can, and it might!
But the continuing strength of oil in a global market where recession is impending, and depression not out of the realms of possibility, suggests that there just isn't enough oil to go around.
OPEC used to curry favour with the US in past years by ensuring that any price hikes were checked by rising output. There has been no suggestion that OPEC is even interested in this idea anymore.
Smurf makes some valid points about what we should be looking for, irrespective of any lip service paid by the Saudis.
Next hurdle is $110, and looking like getting there with ease.