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Supply and demand? Not for oil

While I was not a finance major in college, I do know a few things about supply and demand. If there is ample supply and lower demand, prices should be low. If there is limited supply and high demand, prices should be high. I guess oil investors never really studied supply and demand economics.

Black gold is higher in European trading, as investors believe that the U.S. recession may have bottomed. Such a bottom could signal rising demand, which is enough for beleaguered black gold investors. In fact, Gerard Rigby from Fuel First Consulting in Sydney, Australia, noted, "The feeling is we've seen the worst of it, and the only way now is up . . . Some of this is also a trading momentum play."

Continue reading Supply and demand? Not for oil

Russia and commodities

Relatives of this blogger just returned from a trip to Russia. What were their thoughts? Not good. Poverty is aplenty with both kids and the elderly begging for their next meal.

This blogger also understands that Ukraine is also having a tough time. Mostly an agrarian economy, it is having difficulty building the governmental support systems that are so vital in supporting farmers in the more developed countries.

Why is Russia not progressing faster with oil prices staying at high levels? We are in the information age not the industrial age. No matter how great the demand for commodities is to support the booming global economy, the commodity-focused economies simply do not keep up with the information age economies.

Russia's plight is a good example for picking stocks. While the supply and demand balance for commodities currently looks pretty good, do not forget about the information age stocks.

"Big oil" is not the problem: Alexander Green's perspective

This post is based on an article written by Alexander Green, Investment Director of The Oxford Club. My thanks to Mr. Green for his straightforward insight.

Let me begin by stating that my only argument against the oil industry has been their "the only game in town" attitude. Never have I complained that oil companies show too much profit. I have never accused the oil industry of gouging or unjust profiteering. With that stated, let us continue:

Oil companies DO NOT set gasoline prices at the pump. Those prices are dictated entirely by supply and demand economics. The single biggest driving force in the economics of crude oil today is the increasing demand by growing industrialized nations, China being the biggest by far. Even the United States Supreme Court declared that they find no evidence that oil companies are manipulating oil prices in any undue manner. This issue will, of course, remain in hot public debate.

Continue reading "Big oil" is not the problem: Alexander Green's perspective

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Last updated: May 28, 2012: 06:55 PM

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