Last week when I was in St. Paul Minnesota
Last week I was wondering if the prices on plastics
commodities had also seen similar drops. Probably not, as material suppliers
hold on to the high pricing as long as they can to maximize their profits while
molders and converters are slow to take advantage of the huge drop in crude.
Why is gas going down so quickly? The first reason has to be
the strengthening dollar at the prospect of rising interest rates. That may not
yet happen as the Feds are concerned that a rising interest rate in the US may cause a slowing down here with an already
slow Europe resulting in a global slowdown and
more serious problems.
Second obvious reason is a weakening in demand. That is more
troublesome. Europe is already in a slump.
Look at your international funds like VEU that have been taking a nose dive…
dropping oil prices is going to hurt Mr. Putin even more than us and cause a
full fledged recession in Russia as his oil revenues drop while he keeps
putting money into his military machine. The Saudis I hear are not planning on
reducing oil supply this time and the US is also turning it on.
Eventually oil will find a bottom. Is it here now? I see
high volumes trading on OIH and a precipitous drop in price which may signal a
short term bottom but I am not one to go in front of a falling knife. Let it
find its footing, stabilize and make some moves up before I will put my toe in.
Meanwhile I just filled up my car at $2.95/gal in South Carolina
No comments:
Post a Comment