alexdg

Oil: Supply and Demand? Hardly!

"Bring on a “W” recession and poof!, thatpremium disappears, as it did last year." <-- totally agree.

Next quarter gdp numbers won't be as rosy. National sentiment is getting worst on the economy front. Double dip is as probable as recovery at this moment.

On Oct 30 08:41 AM Mad Hedge Fund Trader wrote:

> cgy Crude has been trading like a 3X short dollar ETF. If you look
> atpure supply/demand considerations, oil should be trading in the
> $40-$50range, not the $85 that we have seen. That means that a $35speculative
> premium can be laid purely at the door of the big hedgefunds. The
> big oil producing countries, seeing Obama’s policies leadingto a
> weak dollar for as far as the eye can see, are also ditching theirbucks
> as fast as they get their hands on them. That is why the Gulfsheikdoms
> were one of the biggest buyers of crude near last year’s $148peak.
> This leaves industry insiders clueless about the price directionof
> their products, not an easy way to run a business. They understandrig
> counts, tanker deliveries, and depletion rates, not commitment oftraders
> reports, Bollinger bands, and Fibonaccis. No doubt it was theircarping
> that brought regulators to pressure Deutsche Bank to shut downits
> double long oil ETN (seekingalpha.com/symbo...). Of course,
> this all means the consumeris getting shafted, paying $3.39/gallon
> at the pump, instead of $2.This premium is causing a drag on the
> economic recovery as well.Europeans and Japanese who are paying up
> to $10/gallon are wonderingwhat we are bitching about. Bring on a
> “W” recession and poof!, thatpremium disappears, as it did last year.