NYMEX crude oil hits $142.26 record, investors flee falling stock markets

This article belongs to the NYMEX crude oil price records story arc.

bloomberg.com :

Crude oil rose above $142 a barrel for the first time as falling stock markets spurred investment in commodities. Oil has gained 46% this year as concern that the economy may head into a recession pushed the global equity markets [MSCI World Index] down 12%. Crude oil for August delivery climbed to a record $142.26 per barrel today. Yesterday, the contract hit a record of $140.39 as Libya threatened to cut output and OPEC's president said prices may reach $170 within months.

- This is the second trading day in a row that crude oil prices have hit a record on the NYMEX. If we were to get another of these 5-trading-days- or 7-trading-days in-a-row records then we could be on track to hit $150 oil faster than many people might expect. Beyond that, the next resistance level would be $180, and then on to a big fat $200. Expect lots of hue and cry when oil does reach $200 per barrel. So it looks like it was a good move for the fund I am managing to have gotten in at around $130 support. I was sort of semi-waiting for $120 and was going to setup a buy order for that level but of course that did not materialize. Oil is in a bull market, and we haven't seen anything yet!

Singapore stagflation : May 2008 exports fell most in 17 months; inflation at 26-year highs

This article belongs to the Singapore stagflation watch story arc.

bloomberg.com :

Singapore's exports fell the most in 17 months in May [2008] as the island's manufacturers shipped fewer electronics and other goods to the US and Europe. Non-oil domestic exports dropped 10.5% from a year earlier, the trade promotion agency said today [17 Jun 2008]. Manufacturers across Asia face easing demand amid slowing growth in the US, the region's largest overseas market. Pharmaceutical shipments dropped 48.5% in May from a year earlier, while electronics shipments slipped 8.5%, the 16th consecutive drop. Semiconductor shipments dropped 12.6%. Sales to the European Union fell 28% in May and US shipments dropped 22.3%.

- The Singapore economy continues to be confronted by stagflation as economic weakness persists and shows signs of actually worsening, while inflation continues to run at 26-year highs. As I have commented earlier, this is as classic as it gets regarding the definition of stagflation : stagnant or slowing economic growth in a time of rising inflation.

Sure, biotech manufacturing is subject to some "lumpiness" as equipment needs to be cleaned and re-setup for the next batch of medicines, but a 48.5% drop year-on-year? This is as good as "falling off the cliff", a sinking sensation that many in the peakoiler community are very, very familiar with. And electronics? 16 consecutive drops in 16 months. They could be trying for some kind of record here, together with semiconductors. A very ugly picture, especially given that inflation is still ongoing, and crude oil continues to set new record highs regularly.

This is the kind of situation that can lead to restlessness amongst the population, and in extreme cases descend into disorder and chaos and in fact it already has in some countries. You can be very sure that the government has got to be very concerned about it. Meanwhile, as an individual, in order to hedge against slowing economic growth, you might want to look into getting a job in a traditionally defensive sector, such as government, military, education, healthcare, and such. And as an investor, in order to hedge against inflation, what you can do is to buy into commodities, hold on to them, and sit tight. Gold and oil and uranium and food and other resources are going higher. Much, much higher. We ain't seen nothing yet.

Crude oil hits $140.39 record on NYMEX as Libya warns of output cut

This article belongs to the NYMEX crude oil price records story arc.

bloomberg.com :

Crude oil jumped above $140 to a record as Libya threatened to cut output, OPEC's president said prices may reach $170 by summer and the dollar weakened. Libya which produced 1.85 million barrels of crude oil per day last year (2.2% of global supply), may curb output because of a US law that allows terror victims to seize assets of foreign governments as compensation. Oil, gold and copper climbed as the dollar dropped because the Federal Reserve gave no signal of higher interest rates. Crude oil futures for August delivery on the New York Mercantile Exchange [NYMEX] touched $140.39 today [26 Jun 2008], surpassing the previous $139.89 record.

- This is starting to become a regular occurrence again - waking up over here in Singapore to a new crude oil record in overnight action on the NYMEX exchange. Taking a look at the various factors (or excuses as I like to term them) that the media has attributed to crude's rise, a peakoiler like msyelf cannot help but notice that the reason du jour has just switched from "speculators" to "Libya".

While the dollar factor is still mentioned and does constitute one component, you have to take a look at the charts to apreciate the divergences and ironies therein. USDX, the US dollar index, is currently floating around 72-odd, down from recent strength when it hit 74 resistance and turned back. But then, back in mid-March 2008, USDX was even lower, floating around 71 and close to 70 support, while crude oil was "only" $110 at that point. So, let's see : 71 USDX = $110 oil, while 72 USDX = $140 oil? Well, so much for the dollar factor.

Since we are talking support and resistance, a technical analysis of the crude oil charts is in order. We have been in a back-and-forth trading range throughout most of the June sessions, yo-yo-ing in a consolidation rage from just above $130 to just below $140. Fellow peakoiler simontay78 has likened it to a "shuttle run" - I think that's quite an apt description. This latest $140.39 record represents a breakout above this consolidation range and clears the decks for a run to the next resistance level which is $150. Beyond that, the subsequent resistance levels remain at $180, $200, $300 and way over $400. Support levels are at roughly $10 intervals at $130, $120, $110 and $100, and as a consumer it rather pains me to say this, but we might not really be able to count on the last 2 to come about.

Oil is in a bull market. We're going to $150 and beyond.