Earlier I took a look at the obvious impact that the pig pig flu outbreak could have on airlines, but I was surprised to see the profound impact it has had in the oil patch.
Black gold futures are 5% lower this morning because of global economic recovery concerns that have surfaced thanks to the "deadly swine flu." In early morning trading, June-dated crude was trading below $50 per barrel and recently dipped below $49 per barrel.
Commerzbank told some of its clients that "Fear is dominating the cyclical commodity markets today, as investors are concerned that the spreading of swine flu in Mexico may severely dampen hopes of an economic recovery." That said, the bank did note that the concerns may be "premature" and oil should continue to "move sideways, with some volatility between $45 and $55."
Bottom line: the oil market is volatile and should continue to trend sideways in its trading range between $45 and $55. Is this swine flu fear overblown? Possibly, and I don't think that it will have as big an impact as many think on the world economy. In fact, I think we should be a bit more concerned about the health of General Motors and the likes -- but a distraction is a distraction, and that is all bears (or bulls) need to stage a quick run.
Before you question how swine flu can impact oil, remember the ghost of SARS hangs over all disease outbreaks. SARS had a major impact on the travel and oil industries, and many are afraid that swine flu may be the same.
Bottom line: the oil market is volatile and should continue to trend sideways in its trading range between $45 and $55. Is this swine flu fear overblown? Possibly, and I don't think that it will have as big an impact as many think on the world economy. In fact, I think we should be a bit more concerned about the health of General Motors and the likes -- but a distraction is a distraction, and that is all bears (or bulls) need to stage a quick run.
Before you question how swine flu can impact oil, remember the ghost of SARS hangs over all disease outbreaks. SARS had a major impact on the travel and oil industries, and many are afraid that swine flu may be the same.
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Reader Comments (Page 1 of 1)
4-27-2009 @ 11:43AM
Voodoos said...
All lies!
www.voodoos.wordpress.com
4-27-2009 @ 12:18PM
JohnGalt2020 said...
Entire list of swine flu stocks @
http://collegestock.com/blog/12-potential-swine-flu-stocks-on-the-deans-list-for-monday-42709/
4-27-2009 @ 12:40PM
Iridium said...
The oil manipulators don't care about anything. They set a price target and they are going to keep oil at that target even if a 10 billion barrel field is found tommorow and people stopped driving altogether.
Nobody can find any fact that supports the current level of oil. The only answer is to figure out who is manipulating the price of oil and kill them.
4-27-2009 @ 4:43PM
hannahbflynn said...
Have a look at how the recession might affect our access to flu drugs, http://twurl.cc/uq3
4-29-2009 @ 11:24PM
journalrhythm said...
These days there's more articles about it in the news
than people who have actually contracted swine flu
more people gonna die driving in their cars
but that don't make news like new flus or SARS
35,000 deaths occur every flu season
we weren't concerned last year, what's the reason?
i'm not saying that you shouldn't be worried
but worry on the news gets bigger in a hurry
to hear me rap my full opinion, watch:
http://www.youtube.com/watch?v=7uSXwbOMV3E