The whole catastrophe.
I have made and lost more money than I want to talk about.
I have gone out on a limb a few times to soothe my nervous friends about the price of oil. So, one more time, here goes:
- There is no GLOBAL shortage of oil
- There is an occasional political shortfall of production
- Refining capacity is a little short of the mark
- All the market is looking to squeeze every dime out they can
What that means is crude is near it’s high. From here ($45-65 bucks) the price of oil will fluctuate. The odds of it going higher are much less than the odds of it going lower. There are zero fundamentals pushing it.
Every weather pattern (hurricane), every political unrest (Nigeria), every pipeline bombing (Iraq) will cause ripples. But in the big picture, there is not much pressure on the upside for this market.
Gasoline at the pump will fluctuate but pressure keeps it down. I’m still paying $2.20 in high-priced St. Charles. I will pay under $2 this week as I travel to Columbus. I’ll give you a report.
Here’s where speculators are so wonderful. Every day on the trading floor and on computers worldwide traders read about everything in the market, production, war, refineries, OPEC, et al. And the best they can do in this very uncertain time is $65. Let a few things settle down a little and watch the free fall.
If you really believe the market is going to $100 and we’re running out of oil then empty your piggy bank, and buy as much futures contract as far out as you can. You’ll get rich/poor. I’ll bet poor. On the other hand, when it gets to $45, buy.
Isn’t capitalism wonderful?
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