Friday, January 2, 2009

Oil etc.

That ridiculous chart is the 2 year look at the Nymex crude oil price, courtesy of the Wall Street Journal, whose web site keep getting better.

I think we've established that the marginal buyer and seller of the futures contract has not the been of late the user of the physical product, but rather financial players.

A technical analyst would not be calling for a rally based on that chart until the intermediate-term downtrend is broken, so we are in one of those sublime TA moments when "it's not going to go up until it goes up." If I were a betting man, which I am, I wouldn't be betting on crude, which I'm not. As an interested observer, I'd expect continued daily volatility around this level. Russia threatening to stop shipments to Ukraine seems like a big deal to me, and it was in Europe for about a day this week, but nobody in this country seems to care.

Futures are up nicely for no particular reason. Optimism? You don't say.

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