Thursday, August 19, 2010

Phil Flynn: A 27 Year High

Sure oil prices and petroleum prices rebounded after the Department of Energy’s Energy Information Agency week over week numbers we not quite as bearish as the American Petroleum Institute report. And yes, oil rebounded as the stock market became positive. Yet there was something lost when we looked at only the daily factors. Did anyone step back and ponder that the total U.S. inventory of oil and all petroleum products hit a 27 year high according to the EIA?

Now just stop and think where the price of oil was 27 years ago and what kind of world we lived in 1983. Some things were different but some are the same. Ronald Regan was president and had just lifted wage and price controls on oil. It was the first year that the NYMEX had offered futures contracts on crude, the price per barrel was hovering around $30 a barrel. We were just emerging out of the of a 4 year recession that saw rapid job destruction and an unemployment topped out at 10.8%. Sound familiar.....Read the entire article.

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