Oil ready to drop?
AlphaNinja - Oil has rallied massively off its lows earlier this year, and some see a pullback in order.
Aaron Task has a great interview with James Cordier of Liberty Trading, who is making bearish (negative) bets on near-term oil prices, as well as longer-term negative bets on natural gas.
As I've written about before, oil prices fluctuate wildly, but the underlying demand/supply equation is much more easy to decipher. I wrote in early June:
"A fair price for oil is probably $40-$60, and that's only a best guess. In 1998, with oil at $10, the world used about 74million barrels per day. We now use about 84million barrels, an increase of 14%. Yet the per-barrel price is up 480% - 34 times as much as the underlying consumption."
And for more interesting insights, here is Exxon's earnings report. Rough times...
News Release Earnings2q09
Copyright 2010 AlphaNinja
