Commodity Trade Mantra

Posts Tagged ‘Gasoline Prices’

Inflation - Difficult to Move, But Once Moving, Hard to Control

Three key measures of inflation have recently lurched across the Fed’s threshold of 2%. The recent pickup in gas prices is set to have an even sharper upward impact on the consumer price inflation basket. Inflation can really spin out of control very quickly. If it happens, it would happen very quickly. Inflation is like a supertanker: Hard to get moving. But once moving, hard to stop.

7 Reasons Why Oil Could Fall Even Lower Before Christmas

While OPEC has been reticent and reluctant to defend its oil production levels this year, Russia has been unabashedly boosting exports after six years of declines. As refinery improvements have caused less domestic crude oil demand, this has opened up a window of opportunity for the country to export more.

Global Economic Fears Cast Long Dark Shadow On Oil Price Rebound

The global economic unease may begin to reach American shores. Although an economic slowdown is no doubt a negative for oil prices, the news could provide enough justification for the Fed to hold off on raising interest rates. A delay in a rate hike could likely push up WTI and Brent.

EIA On Board With Lifting U.S. Crude Oil Export Ban

The EIA studied the prospect of crude oil exports in response to questions from Congress, and it builds on several prior reports completed by the agency over the past year and a half. The report is full of caveats and other drawbacks, but the headline takeaway could fuel political momentum to remove the export ban.

Will A Possible Hike In Interest Rates Hit Energy Markets?

While both the equity rally and the commodity sell-off appear overdone, logic dictates that these trends could well continue in the face of an improving economy and rising interest rates. But at the risk of ignoring cognitive dissonance, financial markets also seem ripe for a counterintuitive move, as indicators reach extremes: commodities could rebound amid a correction in equities.

Will the Oil Patch Bust Trigger US / Global Recession?

Since early 2010, energy producers have raised $550 billion of new bonds & loans as the Federal Reserve held borrowing costs near zero. This seemingly inexhaustible credit line is now drying up, with severely negative consequences for oil producers with debt that’s coming due. Could the oil patch bust triggered by oil plummeting to $50/barrel kick the U.S. into recession?

Goldman, BofA Warn Crude Oil Crash Will Have Negative Impact On GDP, Earnings

The direct negative effect of lower oil prices on Energy earnings is clear. Given this historical relationship and oil futures prices, Energy earnings are likely to drop by more than 50% year/year in 2015. This fall would result in an S&P 500 earnings drag of roughly $65 billion, or more than $7 of EPS vs. 2014.

Shale Oil 2015 = Subprime Mortgages 2008

There is a nearly 100% chance that oil prices will remain mired in “shale oil death” territory for as long as the low cost Middle Eastern producers need to recapture market share – and the longer this takes, the more catastrophic losses will occur to shale oil investors – the only viable American industry in the post-2008 world of QE.

The Fed Just Lost Any Shred of Credibility on Inflation

Look at the inflation data & explain why this is not an upward trend for 2014 & an unsettling trend given GDP was actually negative for Q1. What happens to inflation when GDP prints a 4 handle later this year? What happens to inflation when the strongest part of the year from a consumption & GDP standpoint comes gushing into the CPI Reports?

Does A Poor Economy Mean Low Gold Price?

Despite some positive data, Global Economy is showing signs of slowing, a remarkable development in itself when you consider all the money printing and deficit spending of past few years

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