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Decisions can be very “decisionful” (yet another new Scrabble word)…
This has been a week of decisions both with reference to our $300-million, 37 day election and the decision by the U.S. government to eliminate Osama (Been Hiding) Bin Laden. Both events have been comforting take many of you. I am sure you will be very happy when the month of April is over.
This unrelenting monsoon weather pattern is giving me an idea to start building an ark. Not a lot has changed over the last few weeks as the war continues in Libya, civil unrest rattles Yemen, Bahrain and Syria and oil prices keep going up. In the month of April oil is up 5.5% and crude futures prices are up 35% since January. A lot of the current rise in all commodity prices can be attributed to continuing uncertainty and these major factors:
1. Geopolitics / Wars (Real and potential threats to supply)
2. Government Deficits / Weak U.S. dollar
3. Continuing low interest rate policies in the U.S. (Fuels the global bull mkt.)
4. U.S. Feds Quantitative Easing Program 2 (creates artificial demand)
5. Lack of confidence in the U.S. dollar (inverse effect on commodity prices)
6. Expectations for stronger global demand for all commodities.
Until the MENA civil unrest/war subsides and the U.S gets their financial books in order to support a stronger dollar, we expect crude prices will remain above $105 U.S./barrel for quite a while.
By: Roger McKnight, Senior Petroleum Analyst
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