Oil Price Back to Fundamentals

As I stated in my previous post on oil and gasoline, we are on track to the return to normal as speculators unwind their positions. China has stopped stockpiling commodities and the Oil super tankers are all full. When oil returns to the trading range of $40 to $50 per barrel ( in July I suspect) then gasoline will be back to where the major US and european Oil companies want it. Remember that a missle does not hit its target in a direct line. It gets out of its trajectory and wiggles back and forth until it hits the target. That’s what oil prices have been doing.

July ’09 will be the bottom of the recession and we will lay on the bottom as a submarine waiting for other economic depth charges try to blow us out of the water. These charges will be each closing of a automobile plant and downstream parts producers, China reduced buying, and 11% unemployment.

Only Ronald Reagan faced these unemployment and poor economic conditions and it took Bill Clinton to bring us out of the Great Recession of Ronald Reagan.

Only Christmas 2009 will give us any real hope. In March we will see unemployment reverse and we will start adding jobs as the Democrats economic stimulus plan take hold.


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