Oil breaks above an 11 month range of trade. Who would not want to short? Lunch money for many– they pushed the price like there will be no tomorrow. Perhaps they’re trying to shore up support for the policies of certain Republicans who want to see the might of America imperialism work its wonders in Egypt and Syria like it did in Afghanistan and Iraq. Or, as they imagine, like it should everywhere if we just apply more force. No doubt a disorder of mind.
Who really thinks oil can remain this high and go higher? I don’t. But one might speculate that certain interests want the price of oil to skyrocket and the consumption of oil to decrease accordingly. I could imagine this as a truly brilliant move. But the governments and people are so addicted to the infernal combustion engines of power and growth, a break down of our present system would be sure to follow (unless we get busy and tough in a hurry).
Therefore, I think things will settle somewhere in the middle. The trade I liked over the 4th of July holiday was long dollar, short oil:
Who knows the market come Monday? Is more pain in store for the shorts?
When this levee breaks, oil will be a dangerous short in many pairs until it gets to a trading zone that satisfies the powerful and the greatest number of moneyed consumers. Cynical? Yep. But this is the way of the world. One man’s corruption is another man’s soul, and so it goes.