BrotherMaynard

Fundamentals Don't Support Oil at $55-60 a Barrel

The dollar has nothing to do with oil. Read feldstein's piece (its short and to the point):

www.nber.org/feldstein...


I'll even use a simple example...i denominate the value of my shoes in dollars. Now when the dollar falls in value, that means that my shoes go up in price? No.

A commodity, such as oil, is an object with no future cash flows...so you can substitute most anything in that example (hats, ipods, underwear, you name it).

the dollar/oil meme needs to die. notice that the $/oil correlation was nonexistent during the 90's and prior to exempt commercial markets, which today trade huge chunks of daily volume. that's not a coincidence.

Fundamentals Don't Support Oil at $55-60 a Barrel

nice article. good luck w/ that position, btw.

just to add to the speculation debate, last wednesday, the new CFTC Chairman, Michael Dunn, was quoted (link below):

"We were told to look at significant price discovery contracts and we have been doing that,"...noting that preliminary reports suggest "it was much larger than we originally thought" and that staff was "surprised" by the preliminary findings."

This, in no uncertain terms, is Dunn admitting that ICE contracts did in fact have an effect on oil prices...this, in direct contrast to what the CFTC reportedly this time last year. Funny how that works.

Link: www.easybourse.com/bou...