"“The market is like a frog in a pot,” Michael Crofton, chief executive officer at Philadelphia Trust Co., said in a telephone interview. His firm manages about $1.6 billion. “We were in there in the cold water. Then, they’ve turn the heat up and we’re all cooking. I’m still very worried about Europe. If Greece gets a deal, what’s to stop Portugal and Spain from asking their bondholders for the same?”"
So the Greece swap will suceed, rate of Italian bond rate dropped, US unemployment figure improved, these are all good news, now why oil and gas price kept rising?
It is almost da ja vu 1974 when gas price kept rising and by early 80s interest rate skyrocketing.....
Because fiat money (dollars, euros, yen) are being used to buy up oil futures contracts. It's the same situation as back in 2008: Tons of oil sitting in tank farms, salt domes, tankers, etc. that is under a contract. When that contract runs out, the oil doesn't go to market, it get locked up in a brand new contract. Fiat money is basically being converted to a commodity since there isn't a whole lot of faith in the future value of the fiat money.
Two things would bring prices down in a hurry:
The United States gets serious about developing its untapped oil reserves (drilling is banned on most of the United States coast line).
The government gets serious about cutting spending and ending the need for the Fed to buy up Treasuries with newly generated dollars.
A lot of speculators would be selling oil instead of buying it.
The US has to also build more refineries capable of using high sulfer oil instead of brent crude. # oil refinries have closed on the east coast because they can't make money on Brent and the cost to convert the refinery to US source oil is too costly even though the domestic oil is available from Canada and the US. The environmentals keep the US from building. Answer is continue to drill domistically, open up more offshore, and grant permits (down more than 50% on Federal land) and fulfill the objective of the Energy department or close it completely.