Oil Rises on Speculation Asia Demand to Withstand U.S. Slowdown: “Crude oil rose on speculation demand in Asia and the Middle East will withstand a U.S. economic slowdown.
Oil has lost 4.2 percent since touching a record $101.32 a barrel two days ago, as U.S. crude inventories rose and manufacturing data heightened concerns of a recession in the world's biggest energy user. Imports of crude by Japan, the third- largest oil consumer, rose for a fourth month in January, government data showed yesterday.
Prices were also supported today by shipping disruptions in the U.S. and North Sea, and heightened risks to oil supplies through renewed tensions in Iraq and Nigeria.
The Houston Ship Channel, which serves the largest U.S. petroleum port, remained closed for a second day to arriving tankers because of fog. The Houston area's eight refineries represent 13 percent of U.S. refining capacity, according to data from the plant owners and the National Petrochemical and Refiners Association.
“Demand from Indian and China is still booming, even at these prices, and appears at present to offset any slowdown from the western credit crunch,” said Rob Laughlin, senior broker at MF Global Ltd. in London.”
I’m going to say it again: GLOBAL DECOUPLING THEORY IS GARBAGE.
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2 comments:
Markets can stay irrational....
The Chinese and Indians subsidise the price so much that it will take a while for their demand to drop. Their demand does not depend on the world price of oil unfortunately.
The coupling will just take a while to be transmitted.
The patterns in OIL and GOLD looked like consolidation patterns for another leg up.
Macavity,
A technical case for the 'consolidation pattern for another leg up' can definately be made here... hence my tight stops.
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