Ready to Break or is it Hit The Brakes?

Can the oil bulls catch a break as the Senate Super Majority is broken? Well maybe they might have if it weren’t for the fact that China is hitting the brakes.

The election in Massachusetts gave oil bulls a thrill but news today out of China may change that bullish mood. The petroleum market reversed course yesterday as the market correctly predicted that Republican Scott Brown would pull off an upset victory in the Massachusetts special Senate campaign to fill Senator Ted Kennedy’s vacant seat. Or as Senate elect Brown would say “The people’s seat”. The man who will block the Democrats super majority and vote against the universal health care bill sent healthcare stocks soaring helping inspire the Dow on to 115.78 point rally turning oil around on its coattails. Yet today we may see the oil market come back down to earth as reports out of China may once again zap that bullish momentum.

Just when the oil bulls thought they might catch a break, China put the squeeze on. Reuter’s News reported that the Chinese government has told several major Chinese banks to hit the brakes by making them increase their reserve requirement ratio by half a percentage point. Not only that they told these lending institutions to stop lending money for the rest of this month.....Read the entire article.

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Phil Flynn's Energy Report: Dollars Deficits and Oil

A breakout in oil and what do you get, another day older and deeper in debt, like about 1.42 trillion dollars deep. Now it does not get much deeper than that. The US Budget deficit screams while politicians fight over ways to spend more money and the dollar loses ground and respect. 1.42 trillion dollars and the oil bulls continues to breathe easy up in this new atmosphere as a breakout to the upside has the bulls firmly in control.

Just how much is 1.42 trillion dollars? Bloomberg News reports that $1.42 trillion is more than the total national debt for the first 200 years of the Republic, more than the entire economy of India, almost as much as Canada's, and more than $4,700 for every man, woman and child in the United States. Is it any wonder why the Canadian dollar is almost trading at par with the dollar? The Federal budget deficit for 2009, more than three times the most red ink ever amassed and the highest as a perercentage of GDP since the Second World War.....Read the entire article.