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Oil adds to yesterday's big decline, briefly falling below $80/barrel, now -0.9% to $80.72....
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Thursday, June 21, 2012, 7:59 AM ETOil adds to yesterday's big decline, briefly falling below $80/barrel, now -0.9% to $80.72. While lower oil is helpful to the consumer, Mark Hanna would like to see strength in crude as well as industrial names like CAT to confirm the recent bullish action in the broader equity markets.
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There is 1 piece of information which rules - when Brent is at $94, the Saudi budget is balanced. The Saudis LOVE their budget balanced.
when Brent is above $94 is when they buy the Mercedes for their 18 year old high-school graduates
And when brent is below $94, you start seeing double parked tankers in the Persian Gulf.
Someone decides that this kind of info is "none of your business" you, the private investors - so - here it is.
And for anyone who needs further background...
The supply side totally controls the prices, the demand has very little variance. We all drive to work every day.
On the suppliers' side the picture is like this
You have on one hand the pro-west Norway, Iraq, Kuwait, Libya and whatever other countries "we saved from their dictators".
On the other side there are Iran, Venezuela and Russia (shhh... ) who love to see the US suffer, the capitalists going bankrupt.
And in the middle The Saudis - the biggest supplier, and a very big consumer of our Wheat and F-35s.
ALL US presidents have all kinds of understandings with the Saudis, which are again "none of your business". Including human-rights, women-slavery, terrorist-country-decl... food-n-army supplies against ... oil supply for decent prices
yes I know USO is not Brent... but they are tied with a rubber-band.