Oil - Holy Cow

My Stupidity

Oil is Trading at $145 per barrell. I got a tip to buy Oil when it was $90. But I invested in Merrill, Citi Bank and Goldman Sachs. Thinking that worse is over, my little brain started dreaming Dollars... Merrill numbers will beat the street and I will make a killing. But the fact is...... 'BULLS make Money, BEARS make Money and only HOGS get Slaughtered'. You guessed it right, I am Stupid... Let me start Drinking..!!

The Question

My stupidity asked me this question, Why is the Oil price going up..?? Reading various news articles and using some horse sense, I satisfied myself with these answers from Analysts:

• Attacks on Nigerian Oil Fields is effecting Production.
• Russian Oil wells are drying out and it is expensive to explore new Oil wells.
• Consumption of Oil has gone up in Emerging Economies like India and China.

But, though all these reasons sound correct, why a sudden spike..?? In one Article there was a reference to Hunt Brothers in America who created a Silver Bubble taking the Silver prices from $2 an Ounce to $50 an Ounce before it crashed back to $10. They physically warehoused Silver. But stacking is not possible with Oil. The current prices are Futures Contracts for the next month deliveries.... so SPECULATORS are driving Oil North.

Optimism

Optimism says that there will be an Energy Revolution in the coming years. All the existing modes of Utilities and Transportation that depend on Fossil Fuels will be replaced by Renewable sources of Energy like Solar, Nuclear, Hydro, Tidal and others. This Energy transition will create new Economic Opportunities that the Consumer will be interested or made to buy.

Pessimism

Pessimism says 'Expect a World War III'. It is highly unlikely for countries to cope up with the current Inflation in the world. Darwin's Theory of Evolution says 'Survival of Fittest'. If US can take over Iraq, one small Ignition will give enough confidence for other countries to follow the Big Brother.

Realism

Reality is the only Truth. And Truth is Share prices are falling down.

When Rape is inevitable, Lay back and Enjoy