Gas & Crude Ready to Explode!
May 18th, 2008, 7:13 am. Posted under Market Commentary by AppleOption.
Since July 2007, crude has been on irrational exuberance bullish run. On a daily basis we hear “Oil at a New High.” The oil commodity traders backed by Goldman Sachs are on a full court press to ramp oil all the way to $200/barrel. OPEC has stated that the market psychology is driving this recent run in oil and that it has nothing to do with demand!
How many traders will be tricked into believing that these levels can hold or even continue higher? Sooner or later, Goldman Sachs and major commodity traders will cash out their position leaving the average speculating trader holding the bag. There will be a correction!
However, the 2008 hurricane season will get underway June 1st thru November 30th. Don’t be surprised if the “well above-average” prediction isn’t pumped by the media to help cash in on pushing oil higher.
Meanwhile, President Bush states that despite Saudi Arabia increasing oil output 300,000 barrels a day, it is not enough to help domestic prices. His suggestion is to drill for more oil…
Congress finally passed legislation to halt oil shipment to the Strategic Petroleum Reserve. The government realized they were spending record dollars per barrel to pump oil into the ground for a rainy day… when there is a real crisis of demand. Currently there is only an irrationally exuberant speculation of record cost.
Just to beg the question… what about raising standard fuel efficiency requirements to match global standards? The majority of the developed nations have an average fuel efficiency of 35mpg, but not the US. Maybe instead of drilling for more oil or stock piling oil, society can actually focus on other means. Nanosolars process combined with an electric car would be the proper direction. We already have some impressive electric cars, the Tesla Roadster and the Zap-X SUV. Now all we need to do is focus utilizing the sun for our primary source for electricity, as when the sun is gone… so are we.