06-06-2008, 08:36 PM
[quote samintx]Lux, you are wrong again. If it was only that simple.
Short covering, longs getting in, Israel saying they will bomb Iran's nukes, the dollar vs the Euro. It is not just one thing, or simple.
No, it's not that simple, but there's a fair amount of unreasoned dollar chasing that goes on in futures markets as people look for any edge.
For example, in just the past week:
1. Fed guy says, "dollar looks stronger"-->oil prices drop immediately
2. Euro guys says, "dollar not really looking that strong" -->oil prices up immediately
3. Morgan Stanly, "oil going to be $150" --> oil prices approach records immediately
I don't know quite what to make of this, but that's an awful lot of volatility that is not directly to any supply-demand issue. How much of it is just an artifact of the futures market--a potentially devastating artifact that will net some people in the right place boatloads of cash while national economies implode?
Short covering, longs getting in, Israel saying they will bomb Iran's nukes, the dollar vs the Euro. It is not just one thing, or simple.
No, it's not that simple, but there's a fair amount of unreasoned dollar chasing that goes on in futures markets as people look for any edge.
For example, in just the past week:
1. Fed guy says, "dollar looks stronger"-->oil prices drop immediately
2. Euro guys says, "dollar not really looking that strong" -->oil prices up immediately
3. Morgan Stanly, "oil going to be $150" --> oil prices approach records immediately
I don't know quite what to make of this, but that's an awful lot of volatility that is not directly to any supply-demand issue. How much of it is just an artifact of the futures market--a potentially devastating artifact that will net some people in the right place boatloads of cash while national economies implode?