As someone who is starting to think about a summer vacation, I was particularly interested to find experts’ outlook for energy prices. Will we still be paying sky-high fuel charges for airline flights? Will driving to visit my family in DC be more expensive?
There seems to be no consensus on direction for prices.
The bulls argue that tight supplies, hedging against inflation, a weak dollar, political strife, and other factors will continue to pump up oil prices.
But bears say what’s driving the market now is not fundamentals -- rather speculative fervor. When that dies down, they think oil could fall $30 dollars a barrel.
So, the bottom line is there’s no sense in trying to plan a trip based on where energy prices are headed. Crude could soon be trading at 110... or else at 80.
That’s what makes covering financial markets so interesting.
Comments
It should be clear to everyone that speculators - even when they hedge the term - have pooled enough monetary power to cause severe international havoc.
One simple rule can stop all this nonsense. The buyers of commodities should be made to take delivery. If a purchase has to be resold and the price of the product has appreciated, the net profit would be subject to a 100% tax that could be used for humanitarian good such as taking the rain forests out of the hands of the ignorant.
Making a quick buck is on most people's minds including mine. But food, shelter and essential modern world utilities and fuels need to be placed off limits. Add currencies to the list.
So, who among us has the strength and wherewithall to drive certain groups out of the pits? Part of that strength will be tested by very formidable kicking and screaming.
One thing that I have never heard mentioned, on this show, is the role of creating STABILITY in the middle east has on the oil cartel.
With Saddam being a risk to neighboring countries, and all his wars, I wonder if it caused OPEC to be loose as countries would overproduce to get more money for defence.
Now that the USA is policing the middle east, OPEC members can collude with little threat of attack by Saddam or other neighboring countries.
The motive to up oil exports to get more money to defend against the threat of Saddam etc. is now gone.
I sure miss $20 a barrel oil.