Sunday, August 15, 2004
The Elephant's Wager
$50/Bbl. Oil by the End of This Week?
The price of oil continues to shoot up. This is good if your an oil producer, bad if your a consumer. Of course there are many reasons why this is happening, turmoil at Yukos in Russia, Chavez's recall election in Venezuela, increasing demand from China, and of course increasing instability in the Middle East. The Elephant has been skeptical of coverage in the American media on how bad things are in Iraq, but you can't argue with the markets and we are continuing to pay a 'risk premium' for oil due to terrorist attacks in Iraq and instability in Saudi Arabia. The media may have its own agenda, but the markets don't lie.
If things go bad in Venezuela after Sunday's recall vote, and the collapse of the truce in Njaf, expect oil to pass the $50/bbl mark sometime this week. Of course our government get's the planning wrong again!
The Fed's oil bet: A drop in prices is what the central bank is betting on, but it's been a no show so far.
http://money.cnn.com/2004/08/12/commentary/column_hays/hays/index.htm
The price of oil continues to shoot up. This is good if your an oil producer, bad if your a consumer. Of course there are many reasons why this is happening, turmoil at Yukos in Russia, Chavez's recall election in Venezuela, increasing demand from China, and of course increasing instability in the Middle East. The Elephant has been skeptical of coverage in the American media on how bad things are in Iraq, but you can't argue with the markets and we are continuing to pay a 'risk premium' for oil due to terrorist attacks in Iraq and instability in Saudi Arabia. The media may have its own agenda, but the markets don't lie.
If things go bad in Venezuela after Sunday's recall vote, and the collapse of the truce in Njaf, expect oil to pass the $50/bbl mark sometime this week. Of course our government get's the planning wrong again!
The Fed's oil bet: A drop in prices is what the central bank is betting on, but it's been a no show so far.
http://money.cnn.com/2004/08/12/commentary/column_hays/hays/index.htm
