The INSTANT crude hit $100 a barrel, equity markets freaked. The S&P dropped the least because it has component energy companies. Bottom line though: The economy is fragile and already in a recession. High crude prices can only hurt and hurt severely.
In my post Mr Danger, Chavez and Buffet I said I was looking to get short @ $95 and @97. The way oil moved, I actually managed to get short my $97 units @ $99. I am now fully short and somewhat offside. The stop is still $101.
Oil Falls From $100 Record on Speculation U.S. Stockpiles Grew: “Crude oil fell from a record $100.10 a barrel in New York on speculation that a U.S. Energy Department report will show stockpiles rose for a sixth week.
Oil prices declined as traders sold contracts to lock in profits from yesterday's 4.7 percent gain. Crude inventories probably climbed to 303.4 million barrels in the week ended Feb. 15 from 301.1 million barrels as heating-fuel use slows, according to responses in a Bloomberg survey.
“The factors that led us to believe that prices are going to come down are still there,” Lehman Brothers Holdings Inc.'s chief energy economist Edward Morse said in a Bloomberg television interview. “We're in the refinery maintenance season, crude oil inventories have been building not just in the U.S. but Europe.””
Now if only Iran, Venezuela and Nigeria would shut up for a couple of days…
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2 comments:
It's the nature of the beast -- Chavez, Ahmedinejad and Putin all have a vested interest in keeping the prices high, and as soon as it looks like it might drop, they start the saber rattling again. Count on one of them coming to the UN and turning on the crazy for a few days if it gets back down below $90. Also count on our goverment playing right into their hands.
Anonymous,
Let them rattle their sabers. Honestly, its nothing but a game of poker. They really don't have a hand. Sure, they bluff and raise, but they WILL FOLD. They have too. You see, if they did go ALL IN, they'd go bust... so saber rattling is all they can do. Use the spikes in price to get short. Then get out as reality sets in. Yesterday and today are prefect examples on crude.
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