With most investors believing it's inevitable that Ben Bernanke will institute another round of quantitative easing, it has helped support oil prices which otherwise would probably drop much further than the support it has found in the mid $80 a barrel range.
That has also helped shore up the price of other commodities as well, which would have otherwise plummeted even worse than they have been.
Add to that the enormous upward move of the U.S. dollar, weakening China and Brazil, along with devastated Europe, and you see how the price of commodities, outside of agriculture, should be dropping much more than they have.
But the bears have to be careful after learning from the past that Ben Bernanke's propensity to print money is insatiable, and it's only a matter of when he'll do it again, not if he's going to do it.
That's the great uncertainty in the market which keeps support under oil and other commodity prices. And that's even when everyone knows over the long haul more stimulus won't help the economy at all, but it will give a short-term psychological boost, which will push up the prices of many commodities.
Another support for commodities is in regard to the decision by European leaders to commit to taking further steps to shore up the system. While there are still no particulars there, it remains in the back of the mind of bears who would love to short the market even more, but could easily get hit hard if the Federal Reserve stimulates and Europe clarifies what steps it plans on taking going forward. Those elements, more than anything else, are keeping the price of oil from plummeting to below $50 a barrel at this time.
Unwillingness to bet against the probability of another round of quantitative easing is what's standing between the free fall of the price of most commodities.
That's why with oil the price will probably remain in the $80s until more clarity is revealed.
The next important moment is when Ben Bernanke addresses Congress next week about the state of the economy. Traders and investors will listen closely for any clue on which way things may go in the short term.
Showing posts with label Quantitative Easing. Show all posts
Showing posts with label Quantitative Easing. Show all posts
Thursday, July 12, 2012
Monday, November 8, 2010
Oil Prices Today Hit Two-year High, Nigerian Rig Attacked
With the announcement the Federal Reserve was going to print another $600 billion in U.S. dollars to buy up government debt in an attempt to stimulate the economy, oil prices, and other commodities, have been pushed up as the value of the U.S. dollar continues to plummet.
That means the industry is under tension, and when anything is added to the mix, oil prices can spike, like they have today with the reported attack on a Nigerian oil rig.
The main contract for light sweet crude for December delivery in New York surged to 87.49 a barrel, reaching its highest level since the latter part of 2008.
In Nigeria an oil rig in the Okoro field was attacked, with five crew members thought to be taken hostage. Usually that results in a ransom demand being made and paid to criminal gangs operating in the region.
So with the new implementation of quantitative easing, every time something major happens affecting oil prices, one way or the other we'll see swings in price in response to them.
Going forward, most of that will probably be on the upside for oil, as well as a number of other commodities.
That means the industry is under tension, and when anything is added to the mix, oil prices can spike, like they have today with the reported attack on a Nigerian oil rig.
The main contract for light sweet crude for December delivery in New York surged to 87.49 a barrel, reaching its highest level since the latter part of 2008.
In Nigeria an oil rig in the Okoro field was attacked, with five crew members thought to be taken hostage. Usually that results in a ransom demand being made and paid to criminal gangs operating in the region.
So with the new implementation of quantitative easing, every time something major happens affecting oil prices, one way or the other we'll see swings in price in response to them.
Going forward, most of that will probably be on the upside for oil, as well as a number of other commodities.
Friday, November 5, 2010
Schlumberger (NYSE:SLB), Brigham Exploration (Nasdaq:BEXP), Oasis Petroleum (NYSE:OAS) Soar on Rising Oil Prices
Schlumberger (NYSE:SLB), Brigham Exploration (Nasdaq:BEXP), Oasis Petroleum (NYSE:OAS) all closed higher Thursday, moving up with the broader commodity sector on news of the quantitative easing about to be implemented by the Federal Reserve which will add about $600 billion to the money supply over the next several months, increasing inflationary pressures.
Commodity prices, including oil prices, responded as expected, moving up across the board, with gold growing to record levels again, closing in on $1,400 and ounce, while silver rose to over $26 an ounce. Aluminum increased to levels not seen since April.
Light, sweet crude for December delivery settled the trading session increasing $1.80a barrel on the New York Mercantile Exchange at $86.49.
Schlumberger closed at $75.80 Thursday, rising $3.59, or 4.97 percent. Brigham Exploration surged to close at $22.96, gaining $0.96, or 4.36 percent. Oasis Petroleum was up to $23.44 at the end of the trading session, gaining $1.31, or 5.92 percent.
Commodity prices, including oil prices, responded as expected, moving up across the board, with gold growing to record levels again, closing in on $1,400 and ounce, while silver rose to over $26 an ounce. Aluminum increased to levels not seen since April.
Light, sweet crude for December delivery settled the trading session increasing $1.80a barrel on the New York Mercantile Exchange at $86.49.
Schlumberger closed at $75.80 Thursday, rising $3.59, or 4.97 percent. Brigham Exploration surged to close at $22.96, gaining $0.96, or 4.36 percent. Oasis Petroleum was up to $23.44 at the end of the trading session, gaining $1.31, or 5.92 percent.
Venoco Inc. (NYSE:VQ), Whiting Petroleum (NYSE:WLL), Rosetta Resources (Nasdaq:ROSE) Soar on Increasing Oil Prices
Venoco Inc. (NYSE:VQ), Whiting Petroleum (NYSE:WLL), Rosetta Resources (Nasdaq:ROSE) all rose in price Thursday, increasing with the broader commodity sector on news of the quantitative easing about to be implemented by the Federal Reserve, which will add about $600 billion to the money supply over the next several months, placing the value of the U.S dollar at even more threat.
Oil price, as well as most commodity prices, responded as expected, moving up across the board, with gold growing to record levels again, closing in on $1,400 an ounce, while silver increased to over $26 an ounce. Aluminum was boosted to price levels not seen since April.
Light, sweet crude for December delivery settled the trading session increasing $1.80 a barrel on the New York Mercantile Exchange at $86.49.
Venoco Inc. closed at $15.64 Thursday, rising $0.67, or 4.48 percent. Whiting Petroleum surged to close at $106.86, gaining $3.84, or 3.73 percent. Rosetta Resources was up to $25.41 at the end of the trading session, gaining $1.29, or 5.35 percent.
Oil price, as well as most commodity prices, responded as expected, moving up across the board, with gold growing to record levels again, closing in on $1,400 an ounce, while silver increased to over $26 an ounce. Aluminum was boosted to price levels not seen since April.
Light, sweet crude for December delivery settled the trading session increasing $1.80 a barrel on the New York Mercantile Exchange at $86.49.
Venoco Inc. closed at $15.64 Thursday, rising $0.67, or 4.48 percent. Whiting Petroleum surged to close at $106.86, gaining $3.84, or 3.73 percent. Rosetta Resources was up to $25.41 at the end of the trading session, gaining $1.29, or 5.35 percent.
TransAtlantic Petroleum (NYSE:TAT), Vaalco (NYSE:EGY), Northern Oil and Gas (Amex:NOG) Soar on Rising Oil Prices
TransAtlantic Petroleum (NYSE:TAT), Vaalco Energy (NYSE:EGY), Northern Oil and Gas (Amex:NOG) all closed over 4 percent higher Thursday, moving up with the broader commodity sector on news of the quantitative easing about to be implemented by the Federal Reserve which will add about $600 billion to the money supply over the next several months, increasing inflationary pressures.
Commodity prices, including oil prices, responded as expected, increasing across the board, with gold rising to record levels again, and silver surpassing $26 an ounce. Aluminum rose to levels not seen since April.
Light, sweet crude for December delivery settled the trading session increasing $1.80 a barrel on the New York Mercantile Exchange at $86.49.
TransAtlantic Petroleum closed at $3.22 Thursday, rising $0.14, or 4.55 percent. Vaalco Energy surged to close at $6.45, gaining $0.25, or 4.03 percent. Northern Oil and Gas was up to $20.21 at the end of the trading session, gaining $0.84, or 4.34 percent.
Commodity prices, including oil prices, responded as expected, increasing across the board, with gold rising to record levels again, and silver surpassing $26 an ounce. Aluminum rose to levels not seen since April.
Light, sweet crude for December delivery settled the trading session increasing $1.80 a barrel on the New York Mercantile Exchange at $86.49.
TransAtlantic Petroleum closed at $3.22 Thursday, rising $0.14, or 4.55 percent. Vaalco Energy surged to close at $6.45, gaining $0.25, or 4.03 percent. Northern Oil and Gas was up to $20.21 at the end of the trading session, gaining $0.84, or 4.34 percent.
BP (NYSE:BP), Anadarko (NYSE:APC), Conoco (NYSE:COP) Surge on Rising Oil Prices
BP (NYSE:BP), Anadarko (NYSE:APC), Conoco (NYSE:COP) all rose Thursday on the inflationary measures implemented by the Federal Reserve via QE2, which drove the overall commodity market up, along with companies within each sector, including the oil producers.
Commodity prices in general increased, including silver, which increased to over $26 an ounce. Gold prices surged to all-time record highs again, approaching the $1,400 an ounce mark. Aluminum moved up to its highest levels since April, and silver surpassed $26 an ounce.
Light, sweet crude for December delivery settled the day up $1.80 a barrel on the New York Mercantile Exchange at $86.49.
BP closed at $43.91 Thursday, rising $1.54, or 3.63 percent. Anadarko surged to close at $65.96, gaining $2.32, or 3.65 percent. Conoco was up $61.25 at the end of the trading session, increasing by $1.84, or 3.10 percent.
Commodity prices in general increased, including silver, which increased to over $26 an ounce. Gold prices surged to all-time record highs again, approaching the $1,400 an ounce mark. Aluminum moved up to its highest levels since April, and silver surpassed $26 an ounce.
Light, sweet crude for December delivery settled the day up $1.80 a barrel on the New York Mercantile Exchange at $86.49.
BP closed at $43.91 Thursday, rising $1.54, or 3.63 percent. Anadarko surged to close at $65.96, gaining $2.32, or 3.65 percent. Conoco was up $61.25 at the end of the trading session, increasing by $1.84, or 3.10 percent.
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