Oh No..... Oil is too high it will have to come crashing down..... that is the rhetoric that is prevalent in the media. It can just be easily argued that Oil has just broken out, and any break down say to the $93-94 level is just a great buying opportunity. Past 3 weeks there has been a breakout of the same level that yielded a $150 / barrel oil price in 2008.
The worry of governments is that energy costs will eat away all discretionary spending of the population grinding this "recovery" to a halt. What is the most troublesome aspect of the latest move in oil is that Gas prices, which is what matters to civilians. Gas in Toronto, Canada and similar in North America at large are at levels that are consistent with the low range of the channel gas traded for in the summer 2008. Strange? Yes, Oil still has $50 to get to the peak in 2008, but gas has already made it to its peak range.
I would love an explanation why? The only way I can rationalize this is that gas companies have expectations of oil prices getting back to the $150 level and have priced this in now because they can...
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