According to Lowem’s Blog:
Lowem says : “It looks like oil didn’t want to stop at $110 and just had to go one dollar higher. It has since dropped back and is consolidating just below $110.”
- The BBC News analyst thinks that the U.S. Economy will slows down and so will the demand hence believed that the oil prices will comes back down “eventually”, this theory does echo similar “ideas” by OPEC that indicates that global oil demands are not more then the current oil supply hence it’s considered out of the “fundamental” of oil trading.
I say it’s all bullshit.
Looking at the oil chart on the left you can clearly see oil prices had been increasing since 2006 and the only reason why I can think of is that the global demand is constantly increasing and global oil supply is not “sustainable” since 2005 when oil production “peaked”.
Like it or not we are in this together with the rest of the world, higher oil prices is here to stay as you can see the volume of trade in the chart is going much higher as time goes by. Many countries are starting their own emergency oil storage similar to United States SPR (Strategic Petroleum Reserve) such as China, India and Japan. Other countries such as Russia, South Korea, Taiwan, Thailand and Singapore has their own SPR to protect against sudden shortages. Europe and Middle East are having their own SPR too as the rest of the world starts to wake up to the revelation that oil is FINITE and will goes into decline after peaking the oil production.
Many oil exports from oil producing countries goes directly into SPR and not to the consumer market and more countries are increasing their SPR’s volumes in case of emergency shortages caused by any crisis in the middle-east or natural decline in oil supply.
OPEC did speak the truth somewhat that there are more oil in then demand as much of these are straight into reserve instead of “actual demand.” There are also a whole lot of high sulfur content highly toxic oil that is very difficult to refine in the market that many countries do not want to buy.
Comes April we shall see some sparks coming off in the middle east as predicted by some…as hardliner took the lead in Iran’s parliamentary elections, according to partial results early Saturday. Of course, oil prices will see spectacular fluctuation if sparks starts to “AWE” the world.
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