Something is going on. It's going straight up again:

http://www.321energy.com/

Now I don't feel so bad about locking in to heating oil at almost $5 yesterday.

It's going to be quite a ride...

Yesterday the price dropped on promises to pump more and discussion about economics dealing with the problem of high prices. Today numbers reporting actual physical amounts said things are bad and we've heard this other lip service before. Price goes up.

In the end the economy is controlled by the physical and not the other way around.

I wish I had a better feel for what a resistance point might look like in this thing.

With dollar devaluation and the long term peak-related price pressure, I just have no idea where it might even plateau.

I just don't buy that speculation explains any of this. We are talking about a consumable commodity. Once it's delivered, it's consumed. Thus, unlike gold or silver for example, there is not the problem of speculators buying a bunch today with the hope of reselling it in 12 months.

There may be some speculation, but it seems like with a consumable commodity with relatively inelastic demand (so far anyway), there isn't a lot of risk of a glut accumulating somewhere in the system that could crash the price down the road.

Can anyone point to something that could shave $30 or more off of the current price? I can't think of any.

Even if serious demand destruction began to occur, there is still the dollar devaluation and long term commodities bull market forming tailwinds pushing the price of oil higher.

No problemo.

The gal at the gas station today said, "it's going up another $.20" by tomorrow.

Good show overnight, looking out from my timezone. NYMEX crude oil hit a high of $138.30 and is now hovering around $136 at the moment.

Did anyone manage to buy in around $130 support?

BP chief says tight supplies not speculators to blame for oil price increase.
link

Resistance point = $172.61

At that price oil might as well be on Mars for the Bottom 80%.

Demand Destruction looks like Katrina NOLA.

That's the only time the US has had any.

Note:

Not a word this AMon any strikes/protests.

But Boy Scout Camp in Iowa all over.

"In summary, a sharp rise in US and world interest rates is the best way to solve the problem of spiraling energy and commodity prices, which will probably not solve itself. If that doesn't work or is "politically impossible" it's time to prepare the 82nd Airborne for jungle warfare in the Orinoco Basin."

Martin Hutchinson is the author of Great Conservatives

The problem is the US CAN'T raise interest rates. They've backed themselves into a corner. If interest rates go up, the housing market will tank. MANY people have decided their house is an "investment". Raise interest rates and their equity in their house, which is their entire life savings, will evaporate, they'll end up upside down on their mortgages, and massive foreclosures will result.

In spite of all the noise being generated by the fed, ultimately, this is what it boils down to--a choice between losing your home or paying 6.00 or more per gallon for gas. Most people would choose expensive gasoline, because there are work arounds the individual can take to ameliorate the economics of that situation.

However, the inflationary aspects of lowered interest rates could kick off a true hyperinflationary spiral, in which case people may lose their homes, simply because the basic cost of living, becomes way beyond their means and they can't afford their homes, even refi'd at lower interest rates.

Long term bond rates will eventually start to tick up, and the Fed can't do anything about that.

That's going to hurt.

I really don't see how we are going to cope with $4 gas. If you look at what is happening in Europe, and look at the rise in food prices here, you gotta think its getting hard for a lot of people. Our consumer economy will shrink as a result and jobs will go away. The lower end will go first, so people will be losing their 'make ends meet' second job and will spend even less. Unemployment in europe is well over 12%, (can't remember exactly) and we could see those levels by then end of 2009. Congress is already talking about extending unemployment compensation. That just makes the printing presses run faster to make more money, meaning inflation galore. Mr. Good bar has left the building.

BBC: Oil price falls in volatile trade



What the hell is that? Someone copy & pasted an obsolete factoid from the bank and then mangled it to imply the reverse?

So someone tell the 20 million American's who are struggling to fill their gas tanks just to make it to work. Or the independent truckers around the world who are on the brink. Numbers get used, they rarely get used correctly.