Tuesday, Apr 22, 2008
A state of panic has taken over the oil markets, analysts say
BBC: Oil hits $118 for the first time
Oil prices have touched fresh highs as traders bet that violence in key producing nations would hurt supply. US light, sweet crude rose 57 cents to cross $118 a barrel, before dropping back to $117.77, while Brent crude peaked at $115 a barrel. The rises were supported by fears of further attacks on pipelines in Nigeria and oil cartel Opec's refusal to raise quotas to curb rising prices. Comments that it will raise production in 2012 failed to dampen sentiment.
Posted by jack c @ 04:43 PM (696 views) Add Comment
18 Comments
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1. Driver said...
Erm actually is 119.36 now.
2. sold 2 rent 1 said...
The gold oil ratio is down to 7.8
The springboard for gold is coming soon
3. cornishman said...
"Comments that it will raise production in 2012 failed to dampen sentiment."
What has 2012 got to do with anything? And why should anyone expect the promise of raised production in 4 years' time to affect the price today. If, indeed OPEC has any oil left in 2012...
4. cornishman said...
"The springboard for gold is coming soon"
The ratio could always correct by the oil price coming down. What a gooey mess if an oil bubble were to burst...
5. sold 2 rent 1 said...
Nowandfutures.com US M3 (money supply) growth hit 20pc last Friday.
But when will the hot money shift from oil to gold
6. inbreda said...
Don't worry. Nothing to see here. According to Mr Smith, oil prices will be back at $40 a barrel any day now.
7. harold said...
S2R1, yes the disjunct between oil and gold is unusual. Either oil will sharply correct, or gold will resume its bull market. One thing is for sure, the price ratio between real money (gold) and the world's lead commodity will be resolved sooner rather than later. Billary Cinton's bellicose attitude towards Iran will not have helped matters (why is it that she reminds me of Lady Macbeth?)
8. crash n burn said...
Love the charts boys - keep them coming!!!! Any other TA or quant statistics to add anyone????
There's a piece of me that would love to see this forum become a house crash / TA chartist's blog site - everything on one site, imagine that. :)
9. planning4acrash said...
Harold. There is nothing odd bout the oil gold ratio reducing. It shows that oil is getting cheaper, whilst the value of dollars and sterling are going down baby. This is financial collapse and hyperinflation. The Saudi's aint lyin this time about demand.
10. harold said...
"It shows that oil is getting cheaper..."
Qué?
11. planning4acrash said...
Gold is the best indication of value. Oil is getting cheaper if you pay in gold. It is only more expensive if you pay with devalued currency. Rising oil prices are primarily now about devalued Greenback and Sterling with money supply rising at about 20%
12. Slysmiles said...
This is getting insane! By the time this article was posted, oil already hit $120! I don't think this is a bubble either, just plain old money making and fear.
13. harold said...
"Oil is getting cheaper if you pay in gold."
Er, no Planning. You've got it the wrong way round. Oil is getting more expensive if you pay for it in gold, which is why the ratio is falling as per the above graph. What we expect to happen is that the oil/gold ratio will correct, i.e., that oil will become cheaper if you buy with gold, whereas at the moment it is becoming more expensive.
14. planning4acrash said...
Right, well i am talking about the trend since 2000, so i guess that we are now on the same wave length?
15. Jamonit said...
harold and p4ac, that was interesting. So is oil about to pop or gold rally ? My feeling is the former. Surely, if there's a slow down coming, demand for oil will drop. And so gold will also drop...? Unless sufficently compensated for by sentiment driving money into Gold as a safe haven...this is a fine judgement isn't it?
16. jamonit said...
p4ac and harold, that was inetresting. So is oil about to pop or is gold about to rally? My own feeling is for the former..surely if there's a dip coming, demand for oil will drop. And therefore so will gold. Unless there's a sufficiently compensating demand for gold as a safe haven - dependent upon the degree of percieved economic risk....this is a fine judgement isn't it? As far as investing is concerned?
17. planning4acrash said...
Well, Jamonit, the money supply is rising as we speak, so, if the money supply remained constant, I agree, oil would pop. So would gold. I can't seee people regaining faith in fiat money right now when it is being so debased. £50bn from the BOE in one day damn it!
So, not sure where its all going, I'm not a trader, so can't really say with certainty where this is going, tho I think that oil and gold will go up, as printed money is exchanged for rising commodities, forming a super bubble that will spill over into general inflation two years hence.
18. Jamonit said...
But even if money supply increases, surely a drop in demand for oil will compensate and keep prices constant at best? And there will have to be a politcical solution to rising agricultural commodity prices...and with the chinese economy overheating, doubtless political remedies to slow that down as well...so oil must surely drop. But as chinese wage inflation rises, so do prices in our shops, increasing upward pressure on westren inflation, even as we move into recession...so we use less oil, so the price drops [or stay constant at best] whilst consumer goods prices rise...damn it, its all so interconnected...my instinct is to run for cover and bung everything into an hsbc savings account! Or buy gold...perhaps.