CaptainJJack

Today in Commodities: Thursday, July 2

While I have a substantial (for me) holding in the oil sector, I cannot see another bubble until the economy gets back on its feet.

From what I can tell the recent rise in oil price is due to the Chinese deciding that they will make more money holding oil than US Treasuries so they've been using dollars to buy oil. This may be a good idea in the short run, but once they go back to levels based on what they are actually using, I expect we will see crude prices fall.

I also expect that we will see more substitution, using Natural Gas for oil, where possible.

Finally, at $60/barrel, I think coal gasification Fisher-Tropish) becomes viable, and even allowing for carbon capture, we could see this coming on line soon.