April 6, 2012 2:37am ET
I expect oil to go down further as pressure is mounting on Obama to keep prices at the pumps low. Low prices will allow corporate America to breathe a little easier and post profits come end of 2nd and 3rd quarter this year. If Obama needs to release supply from reserves, then he will do so. He will receive support from the Republicans as Republicans are currently in control of the House. With the majority of incumbents belonging to the Republican Party, they will not be against releasing suply from reserves as negative sentiment amongst Americans could affect their candidates' re-election bids.
What will keep the commodity higher is the uneasing tensions in the Middle East. Political instability remains a factor that could cut off supply lines to the west. China's growth will be controlled by the communist government so as to combat rising inflation; the results of which has led to civil strife in several provinces in the last year.
Equity markets should continue to appreciate towards the end of the year. Significant drops in unemployment, a healing housing market, and political events will contribute to this appreciation.
March 27, 2012 9:19am ET
Oil is continuing its streak, the commodity trading above $107 in NYMEX.
Loss of supply from key nations are contributing to the rise of the commodity. Tensions with Iran has been a contributing factor since sanctions were put on the Tehran central bank in order to put pressure on Iran's ambition to gain nuclear weapons. Political instability in Libya, Sudan and Yemen are also making traders nervous that disruptions in production can occur at any moment due to changing political dynamics in the region.
I expect a rise in supply numbers from the Department of Energy, scheduled to be released today at 10:30am ET. The Obama Administration needs to curb prices in order to keep the economic rebound going. Failure to do so will not only hurt the American economy but his electability come November.
February 8, 2012 5:23am ET
I am expecting for DOE inventory report to show a modest oversupply. Oil supplies need to be hoarded as Iranian exports are being choked off due to economic sanctions against their central bank. An oversupply in the United States will give some breathing room to Saudi Arabia who needs to fill the void that an Iranian exports absence will create. The commodity has been rising due to gains in the equity market, which in turn, has risen due to elation of positive news coming from Europe, with the Greek debt problem finally getting resolved. I would watch out for a pullback in the oil market as investors will probably lock in on profits and if the dollar continues to gain. Gold is down, signaling that money is going away from safe haven. If the US equity market continues its rallying trend, gold will sink further, so sell those contracts now to lock in on profits.
January 28, 2012 8:55pm ET
March 6, 2012 1:15am ET
Crude oil prices are still above stubbornly high, at $106.68 in NYMEX. The commodity traded above $110 last week on concerns about a possible military showdown with Iran, Israel and the United States participating. The recent dip has been due to effects from the equities markets' fear of global economic slowdown from China's projections of lower growth for 2012. China is keeping their growth rate in line to control rising commodity prices. For now, the Iran question remains on the table: Will Israel attack Tehran's nuclear facilities or will the Ahmadinejad administration bow down to economic sanctions that has already hurt their local economy and halt their nuclear program? I think oil will continue to climb so long as these questions remain unanswered. The White House has already stated that diplomacy could still work. But will a diplomatic resolution produce a long-lasting peaceful relations in the region? So long as present ideologies of hatred of each country persists, the answer will always be no.
I say crude will, on average, hover around $109-$115 by summer's time. Obama better do something quick or he'll end up like Jimmy Carter come election time.
Crude oil prices are stabilizing In NYMEX, the commodity settling just below the $100 mark at the end of Friday’s trading session. Iranian threats to close the Strait of Hormuz are becoming irrelevant as economic sanctions on the Iranian central bank are pushing consumer goods in the Middle Eastern country at an alarming rate; traders are therefore betting that a blockade will be unlikely due to assurance from the White House that the US will force the free passage of commercial ships if need be. As a result of the sanctions, hyperinflation has already kicked in, with reports of basic food staples escalating to triple the usual prices. With this, public support from the Iranian people will be a hard sell by the reigning regime.
The Iranian issue is significant as the Strait of Hormuz sees 20% of worldwide traded oil pass through the strategic waters. So why are threats to close it are relatively ignored by traders? For one, the United States has strongly warned Iran that an Iranian naval blockade will be challenged by the more technologically advanced navy of the United States. A defeat will lead to added pressure to the regime, the outcome of which will likely have the Ayatollah Khamenei distance himself further from President Ahmadinejad in order to secure the stability of the government. A ruined Ahmadinejad will likely have him either ousted from his post (By pressure from the Ayatollah), or concede to western demands to halt Iran’s nuclear ambitions. Although Iran has stated that their nuclear program is meant for generating electricity, Israel and western nations are not convinced. At any rate, Ahmadinejad has stated that Iran is ready and willing for a new round of talks.
Other factors are playing a part in moving the energy market: an oversupply in the United States, persistent debt problem in Europe and forecasts of slow economic growth.
January 25, 2012 6:06am ET
Crude oil is down in overnight trading, currently hovering at $98.35. The price is being dragged down by increased inventories and imports into the United States. The downward path of the price of oil is necessary; should tensions in the Strait of Hormuz escalate into a military conflict, oil prices will increase. The current administration is in a lot of pressure to keep prices down, which explains the oversupply numbers coming from the Department of Energy. A gloomy European economic picture due to stubborn debt problems will lessen demand for the commodity. However, consumption here in the United States as well as in emerging market countries will feed the market for demand, raising prices. Lower oil prices will be beneficial to the overall economic rebound of the United States as transportation costs across various industries decline, spurring growth.
Janaury 19, 2012 1:38am ET
The Euro gained significantly against the dollar yesterday, as the International Monetary fund plans to boost its resources up to $600 billion to assist in containing the Eurozone financial crisis. The US indices were all on positive territory. With the dollar weakening against the Euro, oil gained and stayed above the $100 mark. In Asian trading, oil gained, currently at over $101, as supplies dwindled. The rejection of the Transcanada Pipeline as well as an embargo on Iranian oil will only add to the pressure on the commodity to move higher within the next few trading days. I think Obama will increase supplies to curb prices from skyrocketing since this is an election year. If oil prices at the pumps goes up above $4, people will blame him and this will paint a negative picture of him come election time. I think that is one of the main reasons why the administration has been not as tough on Iran. Further escalation that leads to military conflict will move oil significantly higher.
Metals posted modest gains. I think gold should be a long buy.
January 10, 2012 3:55am ET
Crude oil has broken the $100 dollar mark due to tensions between the United States and Iran over an Iranian threat to blockade the Strait of Hormuz in response to economic santions against Tehran’s central bank. Oversupply of the commodity in the United States as well as continued debt problems in Europe has assisted in keeping oil from skyrocketing. The sanctions on Iran is due to its government’s determination in creating a nuclear arsenal, which, if successful, would tip the balance of power in the Middle East considerably. This has prompted the United States in green lighting an arms sale to Saudi Arabia worth $29.4 billion dollars just before the close of 2011. The Strait of Hormuz is a stretegic body of water, with 20 percent of traded oil passing through annually.
The strength of the dollar against the Euro has also contributed greatly to the movement of the crude oil market. Although discouraging news about the European economies has not been as prominent in the news as of late, a meeting between French President Sarkozy and German Chancellor Merkel in Berlin has again put the spotlight on the issue. The financial markets has been responding positively since yesterday, January 9, with the European indices erasing losses. The sentiment continues in the Asian market, the Nikkei and Hang Seng posting gains. What will transpire in the Berlin talks will move the entire global financial markets (bonds, currencies, equities, commodities)…just until the next turmoil sticks its ugly head out.
December 15, 2011 4:25am ET
Oil should continue its decline throughout the rest of the year as reports of Saudi Arabia ramping up production will increase supplies in order to deter growth stagnation that is more and more becoming inevitable in Europe. The United States is also looking to post dismal economic numbers as unemployment continue to be stubbornly high. The real estate market is still in the doldrums; as credit becomes more difficult to obtain for consumers due to fiscal conservative efforts on the part of banks and other lending institutions, house prices will continue to fall.
The fiscal woes in Europe displays the interdependency of the world economy. A solution to the European crises will be the catalyst that will turn the global financial markets around. The election year of 2012 will also play a role in movement of markets; oil is already moving due to political pressure from Saudi Arabia against other OPEC members. Saudi Arabia, in turn, has received counsel by the US government to increase production in order to keep prices low so as to not become yet another factor from a US economic rebound. Uncertainty in Europe is strengthening the dollar, which in turn, is keeping crude oil and gold in the red. The commodities should rebound once traders flock away from the dollar and into equities. A restored faith into the Euro will also allow crude oil and gold to ride on a rally.
Crude and gold are up in overnight trading as equity markets in Europe are posting gains. This is fueled by traders buying at cheap and depressed prices.
December 1, 2011 3:31am ET
The markets were elated Wednesday, November 30, the Dow gaining 490 points at the end of the trading session here in New York. Crude oil climbed above the $100 mark, closing just above it at the NY Mercantile Exchange. All this excitement, of course, is due to the move by central banks to extend lending to financial institutions and lowered reserve requirements. In New York trading, bank stocks led the move, with JP Morgan Chase and Bank of America gaining more than 7 percent in intra-day trading.
Crude oil surged past $100, settling just above it at close and gaining a little more at post-trading sessions. It was definitely a good trading day, but sustaining these gains is another question. If the equity and commodity markets post consistent gains, there’s no doubt a bullish sentiment is directing the movement. However, it is important to note that the US equity market was on a losing streak the past two weeks, so the huge gains could be just a hiccup. Slow growth is more likely for the first quarter of 2012 as stubbornly high unemployment rates persists here in the United States. Results in European economic remedies will also not be felt until a few quarters later as such takes gradual time to see significant results.
It would not be surprising if investors lock in on their profits and jump to the sell side as volatility continues to pervade the markets.
Crude still gaining at overnight trading. I think short term, inventory numbers will dictate the movement of the oil market. $100.64 (3:10am ET)
November 22, 2011 8:27am ET
Crude oil flirted with the $100 dollar mark only to fall more than 3% this week on continued disappointing news on the economic turmoil in Europe. It is not surprising that the bond market saw a lot of action, cementing the US dollar as the preferred reserve currency. The Supercommittee’s failure to reach a deal in cutting off $15 trillion dollars from the budget deficit should play a role in the next few days’ trading sessions, but continued news on European economic woes can erase investors’ doubts on the strength of the dollar, and still flock their money there. Political stability is becoming a key factor in investing the past few months as regimes were toppled in Africa and posed a threat to the Middle East. Europe was not immune as strikes against austerity measures in Greece, Spain and Italy took place in the streets of these countries’ respective capitals and saw the formation of new governments with Italy and Greece.
Equity futures are looking good today, however, and a positive trading session today is badly needed as the Dow has erased more than 500 points since the start of November. Strong retail numbers following Black Friday sales and the holiday season in general should buoy vital economic numbers. Failure to create new permanent jobs however, can cause a dramatic drop come springtime, as seasonal employers get laid off and start collecting unemployment checks.
Gold and crude are in the green pre-market.
October 23, 2011 1:23am ET
The US equity market is looking to rebound in the second half of 2011 as US companies are posting profits in their quarterly reports. The commodity market has already reacted, with oil and gold trading higher at the end of Friday’s session here in New York. I expect the markets to continue this trend as investors will flock their money into US equities and away from international stocks; Europe is still faced with a stubborn debt problem and China’s growth is looking to be lower than what most analysts expected at the beginning of the year. This will mean US equities will be the favored investing instruments. The fact that US equities plummeted during the summer offers investors an opportunity to buy in cheap. Seasonal employment will make unemployment numbers dip, but if there are no renewed efforts to spur job growth, unemployment numbers should jump by February. Lack of progress in reforming the social and economic policies of depressed European economies (Spain, Ireland, Italy, Greece, Portugal) will hamper growth in the global equity market. A rise in strength of the US dollar against the Euro will be detrimental to US exports as well as inflow of capital into commodity investing.
Oil should stabilize at current levels. Oil above $90/barrel will be detrimental to the economy as well as on Obama’s hopes for re-election. It is to Obama’s advantage to keep oil prices as they are. With Occupy Wall Street focusing their anger towards the banks, oil price hikes can easily become a part of their agenda, essentially making sitting elected officials as targets to direct their frustrations to.
Gaddafi’s ouster from power will not necessarilly mean that there will be continous supply of new sources of the black gold—we have to keep in mind that the Interim Transitional National Council, those who replaced Gaddafi and his cronies, are in essence, a military junta. The whole country needs to be rebuilt, from electing new public officials, to creating institutions that will serve as the framework for the national body. Lastly, Libya supplies mostly to European countries. Therefore, the US should not rely on Libya as a new resource of the commodity. The fact that it was France and the UK who commited mostly to the resistance and eventual overthrow of Gaddafi means they will be the ones who will be the favored customers of the new Libyan government.
September 7, 2011 7:35am ET
The US equity market dumped 100 points at market close yesterday, mostly from persistent fear of a recession in the United States. Asian and European stock exchanges dropped the day before as well, spreading into the US market at open.
Crude oil dropped as growth forecasts in the US were dull, indicating weak demand for the commodity. Gold touched $1900, going up as high as $1923 before shaving off those gains to $1861. A more cheery sentiment in Asian and European trading at the moment further dropped the price of gold to $1842. Will the US equity market follow suit and finally snap the market's losing streak? Premarket orders should indicate in which direction morning trading will be heading. Equities should rebound today as Asian and European exchanges are posting positive numbers. Crude should follow suit as well.
August 23, 2011 9:31am ET
Saif-al Islam, Ghaddafi's heir apparent to rule Libya resurfaced in a hotel in Tripoli, giving a statement to foreign journalists. His appearance leaves a big question mark on the credibility of the rebels who have said that the Ghaddafi son has been captured. It would not be a surprise if this was Ghaddafi's plan all along: to give out a false statement to his son's arrest as to falsely give hope to the rebels, only to dispel the rumor and make the hit at the right moment to crush their confidence. The oil market has already reacted in overnight trading, the commodiy rising above $85. Should tensions ensue, crude should go further up.
There are some mixed reports coming in the early hours which could move the market; banking giant, UBS, has stated that they will lay off 3,500 jobs. Gold took off some of its gains from yesterday. The metal is currently trading at $85.25. The situation in Libya and weak economic reports should move it higher as traders and investors are still looking into putting their money in a safe haven. Buy into a call spread if you are still bullish on gold. Watch out for any news that will move the metal: a $40 drop in intraday trading is not unlikely.
August 22, 2011 2:10pm ET
The fall of Ghaddafi in Libya caused a fall in Brent crude prices. This is but one factor out of many, however, that drives the oil market. Crude is mirroring the movement of the US equity market, rising and falling synchronously. Gold surged today, with a market high of $1898 before shedding some of those gains in intraday trading. Traders remain cautious as a potential US recession looms with almost certainty due to weak economic reports coming from the manufacturing and financial sectors. The housing market is yet another economic indicator and the numbers for housing permits remains abyssmally low. Ghaddafi's definite overthrow from 40 years in power remains the shining light of news to come to the markets; oil producers are hesitant, however, to state as to how soon can production ramp up.
August 16, 2011 6:40am ET
The US equity market has seen gains the past 3 trading days. Crude has also gained from its low of high 70s during the market dip, but has now risen in the high 80s. Crude fell in overnight trading by $0.86 cents as the dollar strengthened against the Euro and the Yen. Premarket orders should indicate where the commodity will go as trading opens in New York. Gold rose 22 dollars as there are still some traders who are a little hesitant to play into the bond market, reassuring the status of the metal as the preferred safe haven during these tumultuous times in the financial market.
August 11, 2011
The see-sawing of the financial market is a telling of the times: volatile and uncertainty. The plunge of 519 points in the US equity market confirms this. Crude went up as weekly economic report indicated a decline of 5.22 million barrels. The gains were holding into overnight trading, but premarket orders are looking dim for the commodity as numbers are pointing to an open in the red. Gold has skyrocketed, touching the $1800 mark beforeclosing lower. At any rate, the metal seems to be the preferred hiding place for most investors. The selling of the metal is more than likely due to traders locking in on profits to cover losses from the equity market.
August 9, 2011 6:07am ET
Global financial market meltdown continues, as oil slid below $80 per barrel in overnight trading. Equity markets in Asia and Japan also slid, and the continuation of selloffs is looking to persist going into market open here in New York.
There are some investors, however, who are lookng into this doom and gloom episode as an opportunity to buy into the market. Warren Buffett has already made his move, having Berkshire Hathaway make a $3.25 billion dollar bid for Transatlantic Holdings, a reinsurance company. At any rate, caution is the best counsel in these uncertain times, and extreme volatility across all financial markets is expected.
Gold has been buoyed as the Dow shed 1000 points the last two trading days. The metal is now trading at over $1700. The commodity should rise some more as fear and panic has already settled in traders' psychology. Look for selling, however, as brokers will try to cover some of their losses from the equity market. It appears that gold has been moving like a stock, rising and falling within intraday trading as investors are looking for profits here and there to make up from the demise of their equity portfolios.
As mentioned earlier, volatility will stay, so expect wild swings. Any bit of news could buoy or bury any of the tradeable financial intruments within the markets.
August 2, 2011 10:10pm ET
With the plunge in the US equity market, trading in Asia is down as well, with the Nikkei tumbling 227 points in the early hours. Gold surged more than $20 as fears of the US economy cooling and an unimpressive debt deal made traders flock to the commodity for safe haven.
At the moment the US economy is hanging on a thin thread. I think 3rd quarter reports will indicate whether we will enter either a new round of recession or rebound from the depresed market. As each day goes by, the market is looking more and more of the second plunge in a double dip recession. More posting later.
August 1, 2011 4:35am ET
Obama and Congress have made a last minute deal in regards to the debt ceiling; Asian and European indices are reacting positively, with the Hang Send up 131.98 points and the FTSE 100 up 65 points. US equity market should open higher as well with the breaking news. Gold has already reacted, tumbling 16 dollars in overnight trading. The slide should continue when the market opens here in New York.
Crude should open in the green with the debt-ceiling plan news, but worrisome headlines in regards to forecasted economic crunching may keep the commodity from holding on to gains. Crude is currently up over 1% in overnight trading. If crude closes above 99, this would indicate a bullish rally.
Equities should see a healthy rally, as big companies are posting profits in their quarterly earnings reports. I think what is happening with companies that are laggards is that they are simply being beaten out by innovation. Example: Nokia. This company experienced being at the top of the tech stocks but has bottomed due to its inability to keep up with the ever changing technology landscape.
July 28, 2011 1:50am ET
With the debt ceiling issue pervading the market news, traders are becoming more and more cautious and wary. The US equity market saw a lot of dumping of stocks despite better than expected results from big companies. Crude saw extreme volatility, with losses extending up to $2.00/barrel during intra-day trading as renewed perception of a possible recession came to light. A new round of recession will hamper economic growth, keeping demand for oil low.
Gold did not see significant gains, although the commodity was in the green after the market closed at NYMEX. It saw its price hover in the negative territory during most of the trading session, as investors took in profits from the highs and moved their money into the currency market, buying into the Australian and New Zealander currencies.
Oil should see some more red tomorrow as lack of progress from the debt ceiling continue to pervade the news, draining investor confidence and keeping them from investing into the financial markets. Any news highlighting an agreement between the White House and the Republican controlled Congress concerning the debt ceiling should point to a reversal in the equity and oil markets.
July 25, 2011 8:20am ET
Gold is looking to open in the green today, extending gains from overnight trading and from last week. Debt problems in the US and Europe are pushing commodities higher as investors are looking for safe investments. The US Dollar slid against the Euro and Japanese Yen during overnight trading as a compromise between the Democrats and Republicans over the looming debt ceiling collapsed, with news coming out that both parties have drafted varying contingency plans as to how to prevent a default. With the August 2 deadline approaching ever closer, look for some selling of the dollar and movement into other currencies or commodities such as gold or silver.
July 18, 2011 3:17am ET
Oil is lower as worries over the US economy and debt problems makes traders skittish. I think once a temporary solution is in place, oil will climb up as reassurance that the US is once again on track for economic gains. Asian and US indices will perform better against European indixes as contagion is still very much a threat to the economic landscape of the European continent. If the dollar rises further against other basket of currencies, oil should dip, but gold should see support due to it being the preferred hedge against most financial instruments.
I think gold will go up today.
July 12, 2011 9:48am ET
Here's what i was looking or: gold up 6 bucks. Oil is up $1.35 midday trading...
July 12, 2011 7:30am ET
Gold dips as dollar strengthens...the dollar is still looking better than most investments as there is too much negative sentiments on European sovereign debt. Growth is cooling in China too, dragging oil down. Equities wise, i'd go into US utilities or consumables.
July 12, 2011 2:19am ET
Asian and European trading sessions are lower, due mainly to contagion fears of the spiraling debt burden of Greece and other weaker European economies. Now there are talks of Italy possibly joining the list. Spain has been problematic as well.
My speculation for later today: Oil will be lower, but won't cross the 93.35 support. I think there will be some flocking to gold and other commodities.