Business & Technology Nexus

Dave Stephens on technology and business trends

Speculators “Flee” Commodity Markets, Oil Falls

leave a comment »

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 www.uxc.com 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.

Advertisements

Written by Dave Stephens

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

Posted in Opinion

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: