Business & Technology Nexus

Dave Stephens on technology and business trends

Speculators “Flee” Commodity Markets, Oil Falls

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I enjoyed an article published today in the New York Times entitled “Oil Prices Fall as Speculators Retreat.”

Oil prices dipped below $60 a barrel briefly today. Here’s how the CASH chart looks:

(Click Flipcharts from this link for more)

Beyond crude oil, consider the metals market. Gold is down from its high of around $730/oz on 5/12 to ~$590 (-19%). High grade copper is down 15% from it’s 5/23 high of $407. Platinum is down 15% from it’s 5/17 high of $1335. You get the picture.

Oil’s correction appears to have started roughly 4-5 months after metals peaked.

But Uranium (U3O8) has yet to stall its steep ascent. Visit for a quick primer. One interesting fact on the uxc website is that for 2006 about 34% of the total poundage of transactions reported has been purchased by investors, not energy companies. The “Cliff Notes” on uranium is that, like other commodities, emerging China and India need it.

So what is in store for the commodities markets? Will uranium correct like the others? And is this a temporary reversal or the start of a longer-term trend? I wish I could be your expert on this but I am just a spectator. My gut says the long-term trend is up since resources are finite and demand continues to rise.


Written by Dave Stephens

09/25/06 4:14 PM at 4:14 pm

Posted in Opinion

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