Friday, May 6, 2011

Oil Plunge? Go Out?

The 5th of May of 2011 the crude oil WTI (west texas intermediate) almost plunged 10% which for some pundits is a precedent of a commodity bubble burst start. I strongly disagree that oil will keep falling too much I think that the floor in oil is 94 Dls a barrel . I see this 15% setback as a huge buying opportunity, due to the following reasons:

1.- After memorial day starts the U.S. driving season and as Japan comes back to normal the demand for oil and gasoline will rise.

2.-the prospects for the 4th quarter are that Demand will outpace supply in the world, Chinese crude imports increased 11% for the quarter, growth demand for oil remains intact for the rest of the year and the only way of controlling oil demand is with price (so far..)

It has a high probability that emerging economies will demand more crude than forecasted by the end of the year and my oil crude model says that supply will be very thight for 2012.

*this article or any of the previous or following ones does not constitutes any investment advice or suggestion.

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