[Source]
In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.
 When a commodity or a stock moves fast we tend to get very excited. We hope to discover whether or not it has made some kind of quantum leap or is just part of a long term trend. So what the heck is happening to crude oil? Is this a slip? A correction? Or gigantic profit taking? Or none of the above?Since we last wrote this column oil has continued its most excellent nosedive, actually breaching the $60 at $59.80 intraday this week. Just six weeks ago it was busting out at $78 and everyone – this commentator included – thought it was only a matter of time before $80 oil arrived. We did also think that before it hit $80 there could well be a pull back, $64 maybe, $62 possibly. But the recent declines have been savage. There are many factors that have precluded this fall in price but one that most people have forgotten – amidst Iran, the UN and Hugo Chavez – is the end of the effect from Katrina. The effects of Katrina lasted a long time. In the first three months of this year they were still heavily in evidence. Damaged refineries sat along the Gulf of Mexico coast, it exacerbated the flood of cash that came back into the market following the Christmas bonus season. The tightness in the supply of gasoline to the U.S. was compounded through the year to June. It hung around until summer picking up other items like Iran, Lebanon and so on. But sitting high in people’s mind was that the effect of Katrina, plus the cost of the repairs, could be thrown away by another hurricane season like the one in 2005. Click here to read the rest of the article. |
Read more!
Posts
