As investors start to believe that the worst of the current recession is already behind us, they are turning their attention to oil, and today have pushed the precious crude over the psychological $50 mark.Oil is moving higher today with the overall markets, as Wall Street has been seeing hints that things are starting to turn around. Part of the reason for the optimism has come in the form of strong earnings this week from Ruby Tuesday (NYSE: RT) and Bed Bath & Beyond (NASDAQ: BBBY). If restaurants and retailers are seeing things start to rebound, its a good sign for the overall economy, and a sign that people are out there driving their cars around, which helps boost oil prices.
Wells Fargo & Company (NYSE: WFC) is also helping push the market higher today after it announced preliminary earnings. The San Francisco based bank was expected to show earnings for the quarter of 23 cents per share, but stated earlier today that earnings for the quarter were going to be 55 cents per share. Traders rewarded the stock, pushing shares up almost 30% in today's action.
Another piece of news that is helping boost oil today is news that jobless claims last week fell by more than Wall Street had been expecting. Analysts had been expecting to see initial jobless claims fall to around 660,000 last week, but were surprised to see the actual report show that initial jobless claims had fallen down to 654,000. While these are still historically high levels, it is being viewed as another indication that the economy may be finding its footing once more.
While oil traders are looking for anything optimistic to bet on, not everyone is so confident that oil should be trading over $50 a barrel. Clarence Chu, a trader at Hudson Capital Energy, feels as though "I still have to see more to convince me that the economy is turning around," and that he sees oil "trading between $45 and $50 for a while."
Oil is currently trading up $2.72 on the day to $52.10, and earlier was as high as $52.45. At its current price, we are talking about a 5.5% jump on the day.
How are you feeling about the economy these days? Are you starting to believe that the worst has already passed, or do you still remain cautious of the months ahead? Let us hear your thoughts.
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Reader Comments (Page 1 of 1)
4-09-2009 @ 8:03PM
bob miller said...
if Gas goes way up , everything will go back to crap.
IT WAS THE HIGH GAS PRICES THAT CAUSED THIS TO BEGIN WITH.
PEOPLE CAN NOT PAY HIGH GAS AND DO ANYTHING ELSE
WAKE UP
4-10-2009 @ 12:13AM
Marie said...
I just don't get it. When will those in power realize that ALL of this stuff, housing, gas prices, food costs are ALL interconnected? Now several states are raising their taxes to go along with Obama's big plan to bring the US to its knees with all of this overspending and big brother government. Everyone keeps saying to just "vote them out" in 2010, but by then Obama will most likely have spent all of the money and declared himself "King for life".
4-10-2009 @ 7:04AM
scotthomas.scott said...
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4-10-2009 @ 7:37AM
Bonnie said...
The credit card companies are now willing to work with you. What a joke! Where was their willingness to work with you a while back when they slashed your credit limit and topped out your interest rate. They cut their own throats. Let them sink like we are.
4-10-2009 @ 10:48AM
Iridium said...
Shouldn't the price of oil have something to do with the supply and demand of actual oil. Last time I checked we have the largest surpluss of oil in the past 20 years.
90% of the current traders of oil have no business touching the stuff. You can thank your idiotic government for changing the rules so a few brokerages could get in the commodities game and treat oil as a license to print money.
There is no market fundametal that can support a price of $50 a barrel right now. It is impossibel to justify, yet it happens. There are no market fundamentals that can justify the recent stock market rally, yet it happenned.
Our only choice is to shut down the market. It is the onyl thing that will save the economy. Wall Street has become a socialist empire. It is as far from capitalism as you can get. It is completely controlled by a few select groups. The mass population has no effect anymore.