Tuesday September 11, 2007

Prices : Oil vs Dow

energybulletin.net :

For the last few weeks the price of oil and the stock market have been moving up and down in tandem on the theory that should a credit-crisis induced recession occur, it would have a major impact on the demand for oil. Last Friday however, the pattern was broken as oil prices reached an intra-day high over $77 a barrel while the Dow dropped 250 points ...

- Over the weekend, this was something that didn't quite seem to compute. I've been waiting to see oil do a double-top and come down while the Wall Street folks are whispering "recession" which could lead to reduced demand and hence lower prices, but overnight crude oil went vertical and jumped from $76 to $78 and now it's $77.82 at the moment of writing.

If the Dow continues to do 100, 200 point drops and oil maintains this high-70's level or even breaks through the psychologically important $80 level, then something really does not compute, and that something could be Peak Oil. We need a bit more time, Nymex Crude - do a double-top at $78. Or maybe not.

(2007-09-11 13:08:39 SGT) [Energy] Permalink

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