Recovery in oil prices defies actual demand
May 20, 2009
As reported today in the FT and other media, the price for oil reached over $60 a barrel which is a 6 month high. However this is apparently to do with traders taking “positions” They are trading on the basis long term bets around demand well into the future. The actual current demand suggests a lower price of about $50 or even $40 a barrel. The trading is nothing to do with the actual fundamental current demand for the actual black mucky stuff.
There are apparently far higher stocks of oil than ususl at 100 million and 25-30 million barrels of oil products such as diesel and kerosene and that includes a lot in tankers afloat on the sea, just waiting for the price to rise…………………..
The cynic in me thinks that the energy companies will seize on this market confusion and “apparent” price to keep prices higher than they should be. Oh what a terrible thought!