You Can Get Whiplash Watching Oil Prices Adjust
Iran launches missiles! Oil jumps up $9! Bush pledges to allow offshore drilling. It’s down $7!
If the oil price market was a human being, it would be a schizophrenic. But in business this is… oh, who am I kidding. This is still schizophrenic. But with supply being tight, the economy being uncertain and China and India on the fence about how much they will increase fuel prices, it seems like we can expect roller-coaster economics for the time being.
If nothing else, this scenario will enable energy to remain a top issue in the upcoming election. Interesting note: adjusted for inflation, oil prices have now surpassed ceiling price established in the 1860s. So there is legitimate concern for increased prices. Part of the reason why prices dropped was because of uncertainty in the market. You can’t have one section of the economy doing VERY well without it affecting other parts. And with oil dropping off in one day the most it has in 17 years, it’s very obvious that speculators are not sure how to read the market.
–Stephen Payne, Editor, Oil and Gas Investor This Week; www.OilandGasInvestor.com; spayne@hartenergy.com
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