Oil is too high
House prices are too high
The stock market is too high
Anybody buying any of these is being set up to lose their money imo. A 20% collapse in all three would certainly make these markets alot more interesting. In a day, in a week, or in a month, just take these things DOWN.
But oil is already up. Egypt's troubles have not spread across the middle east so that will not longer drive oil. So we are back to fundamentals, which is summer driving demand, and the drawdown of cheap june oil is done. For any real upward pricing to be sustained beyond july contract expiration there needs to be strong drawdowns in crude stocks driven by retail gas demand.
"the drawdown of cheap june oil is done"
That's not what some traders arte thinking...
West Texas Intermediate crude surged
to a 15-month high after U.S. stockpiles tumbled for a second
week. WTI’s discount to Brent narrowed to less than $2 for the
first time since December 2010.
Oil advanced 2.9 percent after the Energy Information
Administration said supplies fell 9.87 million barrels, three
times as much as projected in a Bloomberg survey. WTI has moved
into backwardation, with futures closest to expiration more
expensive than those for later delivery. The gain accelerated as
minutes from a Federal Reserve meeting showed many officials
want employment to pick up before slowing stimulus.
“There’s no incentive to hold supplies with the market in
backwardation,” said Chip Hodge, who oversees a $9 billion
natural-resource bond portfolio as senior managing director at
Manulife Asset Management in Boston. “You are seeing big drops
in inventories and that should continue.”
WTI crude for August delivery climbed $2.99 to $106.52 a
barrel on the New York Mercantile Exchange, the highest
settlement since March 27, 2012. The volume of all futures
traded was double the 100-day average at 3:44 p.m. The August
contract was 90 cents more expensive than the September one, the
steepest premium since October 2008.
Brent oil for August settlement increased 70 cents, or 0.6
percent, to end the session at $108.51 a barrel on the London-
based ICE Futures Europe exchange. The volume for all contracts
was 35 percent above the 100-day average.