As always, thanks for the reply....
The point I am making... that you are missing... I daily read bland comments like 404 makes, and that is what they are; bland comments. They are bland by design; the author can never be wrong; equally the reader can never design a strategy around the info.
Should he care to a put a timeframe on any of his predictions, I will take notice. In the meantime, I know, as does everyone else on the planet, that the price of oil will drop below its current level, equally it will rise above its current level... USD similarly.... can I design a strategy around this...??
As an aside; there is certainly a link between oil price and the USD, because oil is priced in USD. It should be of no surprise that as the USD drops, oil producers raise the price to preserve value. Whilst I am not arguing that the decline of the USD is the main driver, it is a big factor in the price at the pump. Consider the % increase in pump prices between the US and OZ. Equally, price 2001 oil in OZ$ and price it now... not nice.. but not so ugly. As an aside.. do the same with gold... what's done better, your Oz shares or your leveraged home in SYD?
Generally, CX does well out of a weak USD, so a strengthening USD may cause the price of oil to drop, but will be of little solace to CX. It will however be of solace to some of our competitors with different cost structures.
Finally, go back and re-read your Econ 101 notes; to double the price you don't need double demand, you only need excessive demand... To answer, your question regarding the rising price of oil, look to the weak USD, growing World economy, unstable oil production, lack of investment in refining, and then overlay speculation... bingo
To those who say oil will drop back in price; if you were an oil producing nation and you had a finite quantity of oil under your country, now that you know the world will pay USD147 a barrel for it, why would you ever sell if for less? But they are never going to come out and say that..are they?..
