Energies: The common theme in commodities this week was dollar weakness and QE2. With the prospects of it on the table, oil jumped to over $82 per barrel. This makes me nervous. It makes me nervous because oil inventories jumped again this week and now stand at 360.9 million barrels, as reported by the Energy Department. Fuel consumption is down by 6.4%, to 18.5 million barrels a day. This is the biggest weekly drop since early 2004. Inventories are higher than they were a year ago and are 13% higher than the 5-year average. This oil move higher is a currency based moved in my opinion. Since the fundamentals don’t add up in my book, I would suggest watching the greenback carefully. A sudden lift in the currency could send oil futures back to the mid $70 range.
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