Meanwhile, Crude Heads for the Moon
Jun 7th, 2008 | By Doug Casey | Category: Oil Investment & Alternative EnergyIn the energy market Thursday, crude for July delivery headed for the moon, rocketing heavenward to close at a record $138.54/barrel, up $10.75. July reformulated gasoline shot 21.8 cents higher, to $3.548/gallon, marking a two-day gain of nearly 11%.
Traders cited the cratering dollar, combined with international tensions stoked by rumors that Israel might be planning an attack on Iran.
Kevin Kerr, editor of Global Resources Trader said that “fear by far is the biggest driver right now … Shorts were certain earlier in the week that oil would freefall and with [Thursday’s] rally and then [yesterday’s] event, even hardened traders are left shaking their heads.”
That flame of fear was fanned by Israel’s Transport Minister Shaul Mofaz, a close adviser to Prime Minister Ehud Olmert, who was quoted in a local newspaper as saying that if Iran continues with its program for developing nuclear weapons, an Israeli attack on that country’s nuclear sites is “unavoidable.”
Morgan Stanley analysts wrote that they expect to see a short-term spike in oil prices, with crude-oil shipping patterns suggesting that prices for West Texas Intermediate crude will reach $150 a barrel by July 4.
“Distribution patterns of crude oil out of the Middle East are mimicking those of last year as we exited 3Q07, when we predicted an oil price spike into year-end based on our projections of sharp inventory draws in the Atlantic basin,” the analysts wrote. “That same pattern is now again upon us, and we are making an identical call, only this time we are starting from a much tighter Atlantic Basin inventory backdrop.”
Source: Meanwhile, Crude Heads for the Moon
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Doug Casey is a contrarian investor, sought-after public speaker and author of several books. His work "Crisis Investing" held the position of # 1 bestseller on the New York Times list for 26 consecutive weeks. Doug's unusual views on the economy - and just about everything else - have gained a huge following in the investment community, and it certainly helps that his stock recommendations of undervalued junior exploration companies have made his subscribers millions. Now in its 27th year, Doug's monthly newsletter, the International Speculator, is one of the most established and esteemed publications on gold, silver and other natural resource investments. Together with the Casey Energy Speculator, it covers a broad range of carefully selected stocks with the very real potential of double- and triple-digit returns within 12 to 24 months.