April 8, 2008
Heating Oil Prices: Demand Driven or Trader Driven?
By admin
I’ve been on Wall Street for such a long time that I think I’m pretty good at recognizing bubbles. The rapid rise in oil prices since the Fed began lowering rates in September smells, looks and feels like a bubble. Old Wall Street traders like to say that bottoms in market cycles are created when the average joe starts liquidating his portfolio or better yet, starts shorting stocks.
This weekend, I experienced the equivalent when a family friend told me that he was going solar. That’s a $23,000 investment to subsidize a $300 per month electric bill. Sorry, doesn’t make sense to me. I weighed the conservationist approach when analyzing this person’s actions but he’s as much a conservationist as I am shortstop for the New York Yankees.
In recent months, institutional investors have created a relationship between oil futures contracts and a flight to quality. At a time of the year when traders are typically selling oil futures, traders are buying oil futures aggressively as witnessed by the overnight rally in oil prices.
The Fed has done everything they could do to combat the effects on the economy from the credit crisis. Can anyone spell Strategic Petroleum Reserve or better yet, the END OF THE BUBBLE.
Topics: Uncategorized |
July 8th, 2008 at 1:30 pm
Okay, I’m in upstate NY and heat with oil. They say it will cost $5,000 to heat my house this winter based on my average use. My elderly parents live with me and I have to keep the thermostat on 24/7. I am the working poor. I bought my own house seven years ago. I have been getting by, but apparently, me, my elderly parents, and many like this are being sacrificed to the heating Gods this winter while everyone whines about filling up their SUV’s. It’s the end of life as we know it - they might as well round us up for concentration camps, it’s the same thing. I’m just outraged. I can’t get state or federal assistance cuz at $33,000/year I make TOO MUCH to get help because they are funding all the immigrants they keep bringing in who come here and immediately go on social services. When people like us go, America is gone.
July 28th, 2008 at 10:47 pm
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