With Oil At All-Time High Prices, Suddenly There Is Enough Oil - Then Why Did The Market Fall 104 Points?
Last week, I did a post about the Goldman Sachs prediction of tightening oil supplies over the coming years which could lead to oil in the $65-$105/barrel range. The Goldman report and those of others were based on predictions that we were about to reach a ceiling on available supplies of oil and the industry’s capacity to deliver it to market at a time when demand here and abroad was rising unabated. Some of you thought that the Goldman report was nothing more than an attempt by them and others to drive up oil futures prices for a quick bit of profit taking.
To your credit, sure enough since that prediction and with oil at all-time highs suddenly there is enough oil apparently to get us through the summer driving season, according to our own government. So either Goldman is guilty of something that Eliot Spitzer may want to look into, or OPEC, the industry, and our government suddenly found new supplies to bring to market once a certain inflated price target had been hit.
Funny how that happens.
Update: Oh, please pass Wall Street the valium. After saying initially that the Street liked the sound of falling oil futures and a dampening consumer demand, the market falls 104 points today. Why? Because now the market thinks that corporate earnings and consumer spending will both be smothered by rising oil prices this year. To top it off, after hearing what the government said about energy supplies earlier, upon reflection the Street doesn't buy the happy talk about falling oil prices. Retail sales came in lower than expected today (duh!), and now the Street is worried that the economy will hit another "soft patch" (translation: GOP incumbent road kill).