Image by Yuan2003
From the FT:
In energy markets, Nymex May West Texas Intermediate rose $1.64 to $51.02 a barrel while ICE May Brent added $1.36 at $52.95 a barrel.
Copper pushed above the $4,500 mark, rising 2.8 per cent to $4,505 a tonne, helped by a fall of 7,425 tonnes in London Metal Exchange stocks which have dropped below the 500,000 tonne level.
Expect this to continue, you can’t pump all this money into the world economy without it going somewhere, and specifically, as speculators are bailed out, they don’t really have a lot of places to put their money except oil. The “buy up trash and game Geithner’s plan” play isn’t available to everyone, after all.
$52.95 is not cheap oil, especially in a down economy like this one.
DupinTM
Sorry, left this same comment on the Virginia post when it was meant for here. Anyways:
Ian, I’ve been listening to a lot of Jimbo Hoyer’s virtually speaking radio podcasts (including yours! awesome), and I’ve been wondering over Stirling Newberry’s comments vis a vis the Deep Liquidity People’s stance.
Definition – Deep Liquidity = the Kim Kardashian/Paris Hiltons of the world, but with slightly less brains and much, much more greed.
He, and now you, have said they’ll flee to resources. I know James Howard Kunstler has said he predicts super high oil (150ish), but though I dunno if that’ll happen – and I don’t want to give the impression that I think that’s even close to what’ll happen – what would go down on the world stage, given the recent G-20 summit that got nothin done regarding bank regulations, if oil goes up to, say 70 or 80 dollars? What would Hugo Chavez and Khameini (sp.) do? As to your last post on the middle east, what would this do to the situation between the Sunni and Shia in Iraq? I apologize for not knowing the distribution of the oilfields, but that’s sounds to me like something that should be top-posted on the Huffington Post for a long time.
Ian Welsh
Huffpo did put it on their front page.
I don’t expect 150 dollar oil again, at least not this cycle, but it isn’t necessary. The economy was overheated before (even if it was underperforming), this economy will shake apart at a lower oil price.
Iraq: Most of the oil is in Shia territory, some is in Kurdish, depending on how you count Kurdish (which is why they’re ethnic cleansing), essentially none is in Sunni. So the Sunnis are potentially in a world of hurt.
senecal
““buy up trash and game Geithner’s plan” play isn’t available to everyone, after all.”
Very interesting! I’ll forward this on to my friends who are still stuck on the “socialization of losses” phase.