Oil prices have approximately doubled since this time last year. The increasing demand and tight supply in China, Brazil and India is playing a part in driving the price of oil higher. Weakness in the US Dollar is also causing investors to buy commodities as a hedge against inflation. Oil has become a safe haven due to weakness in the USD. Oil is priced in dollars, and because the dollar’s value has fallen massively, oil is significantly more expensive to Americans.
The geopolitical concerns in countries such as Nigeria and Venezuela further bolster the high price levels. Recent violence in Lebanon between Hezbollah and Lebanon’s pro-western government could trigger increased unrest throughout the Middle East.
The price of oil is especially vulnerable to manipulation. Oil is easily prone to supply disruptions - and the complex nature of the global oil system also makes it hard to estimate how much oil is available at a given time.
Although I think the price of oil is out of whack with fundamentals and has been artificially driven up by speculation - I believe the forecasts of $150-$200 oil in the not too distant future may come to pass -
I’m trading oil in a demo account, well not really trade, what I did is buy 1 lot and leave it to run its now at 880pips, this same lot was down 600+ pips last Friday. I’m assuming by the end of this month it will reach about 4000+pips. End of year xxx,xxx pips.
when you say one lot, what did you buy one lot of ?
I assume one lot of “oil” , similar to gold or silver rather than another currency.
The reason I ask is that I use OANDA and I can’t find oils on OANDA, however it did take me quite a while to find GOLD and SILVER (which was silly because they are just au and ag !)
Which broker do you demo with ?
Thanks
financialworldmarketsmart Good site for real fundamentals and forex trade calls.
The SPR was forced to stopped the madness by the US Senate Tuesday May 13th. Wall Street energy traders and Houston friends of the family energy traders have been supported non stop by the SPR which holds nearly 1billion barrels of crude at the moment. The SPR was forced to stop buying crude until prices reach $75/barrel or 3 months has passed. This is a great achievement by the Senate and we should all be proud of them. Intelligent conservatives everywhere should be ready to kick Bush out after he said he would veto this vote if he could. The reason he cannot veto the Senate vote was because it was passed by such a large margin it’s considered “veto proof”.
The Strategic Petroleum Reserve (SPR) is an emergency petroleum store maintained by the United States Department of Energy. The US SPR is the largest emergency supply in the world with the current capacity to hold up to 727 million barrels (115,600,000 m�) of crude oil. The second largest emergency supply of petroleum is Japan’s with a 2003 reported capacity of 579 million barrels (92,100,000 m�).
The current inventory is displayed on the SPR’s website. As of May 07, 2008, the current inventory was 702.0 million barrels (111,610,000 m�). At current market prices ($125 a barrel) the SPR holds over $88 billion worth of petroleum.
On May 13, 2008, the United States Senate and House of Representatives voted near-unanimously to temporarily suspend the 70,000 barrel per day shipment of petroleum to the nation’s emergency reserve[1]. A temporary halt to SPR stockpiling is hoped to increase oil supplies and thereby reduce the cost of oil, although analysts are divided on whether it will have a meaningful effect to consumers[2]. Shipments to the Strategic Oil Reserve would resume at the end of 2008.
The United States started the petroleum reserve in 1975 after oil supplies were cut off during the 1973-74 oil embargo, to mitigate future temporary supply disruptions. According to the World Factbook[3], the United States imports a net 12 million barrels (1,900,000 m�) of oil a day (MMbd), so the SPR holds about a 58-day supply. However, the maximum total withdrawal capability from the SPR is only 4.4 million barrels (700,000 m�) per day, making it a 160 + day supply.
Hi DoctorG,
US based brokers won’t let clients trade spot oil. You will have to trade oil on the futures market or find a forex broker outside the US to trade spot oil. I don’t know the full reasons behind this. Maybe someone could elaborate.
Oil traded little changed, after falling from a record yesterday, before a report expected to say U.S. crude stockpiles dropped last week. Read the full report from- Bloomberg.com: News
Oil will be $200 a barrel…minimum. In the news yesterday was the talk about how the world economy can’t tolerate $200 a barrel oil. Well, if we insist on creating this war, we get total annihilation of the global economy. I know a number of crazy adults who think that driving us into WW3 is smart. Well, can they figure out that economic collapse has a downside? No? I doubt even this news will dissuade everyone. Because people willing to destroy everything so they can steal olive groves next to Jerusalem won’t care if all this creates the Apocalypse.
