English writer and farmer Thomas Tusser said, "A fool and his money are soon parted."Maybe one can modify the above for the early globalization era: "An oil bear and his money are soon parted."
Oil reversed course and closed sharply higher Wednesday, near $131 per barrel, after Morgan Stanley said Brent oil from the North Sea could easily reach $150 per barrel.
Oil had drifted to as low as $125.96 early in the session on the belief high oil / gasoline / diesel prices will reduce demand, globally. But that sentiment proved to be 'famous last words' after Morgan Stanley (NYSE: MS) co-head of global economics Richard Brenner said oil supply constraints remain a concern, juxtaposed against still-strong global demand, Bloomberg News reported Wednesday.
That was more than enough to send traders into buy-mode in the current market, oil reversed and surged higher to close at $130.97, up $2.12 per barrel.
The other major energy commodities also closed sharply higher Wednesday. Heating oil jumped about 3 cents to $3.83 per gallon, unleaded gasoline surged about 6 cents to $3.43 per gallon, and natural gas climbed 13 cents to $11.94 per million BTUs.
Glad to be stopped-out
Jim Dietz, independent energy trader, like many others, was stopped-out with oil-short and heating oil-short trades earlier in the day, amid oil's latest lurch to the stratosphere. "It was your basic whipsaw day, a day when you can lose about $5,000 real quick," Dietz said, and added that he didn't lose $5,000 on the day, "but there were losses."
"Getting stopped out early on a day like today is a good thing. Trust me," Dietz said. "The market is still in this frothy mode where people are hitting the buy button on practically any negative news, and not really evaluating its impact on oil supplies."
Therefore, Dietz said he will remain flat, "until more stats clarify the supply situation." Another key statistic will be released Thursday, a day late this week, due to the U.S. Memorial Day holiday: U.S. weekly oil inventories announced by the U.S. Department of Energy at 10:30 a.m. EDT.
Google's plan for netbook PCs moves higher into the clouds
Closing Bell: Stock bulls and dollar death (DDRX,GMCR, PEET, SBUX, EBAY, CI, TECD)
So long peak oil, here comes peak uranium
Reader Comments (Page 1 of 1)
5-28-2008 @ 6:28PM
william lindblad said...
It will come down - but not before it takes everything with it!!
Demand will stay with trade - when trade goes?