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| It certainly went up in a big hurry even in the face of bearish news at times. Maybe oil doesn't have a fundamental reason to be this low, but in reality we were not running out before (just like corn) so it didn't have a fundamental reason to be at $150 either.
I know it would be super boring for the trade, but when only end users and producers are involved it tends to be much more stable and much closer to the cost of production (these are commodities after all). With the outside folks jumping in we get much more action but they make money both directions and really want it to go way high then way low. The fact that the stuff affects the economy isn't really pertinent to their business. So, the media, us, them, everyone tries getting in front of the event with some sort of story. In reality it's going down because it can and will do so until the trade decides to reverse things.
The assumption has always been that the funds have piles of money laying around. Markets retreating could signal those piles are not as big as before. Not as much to throw at the market to keep it going up. The short guys will profit on the way down and it remains to be seen how much energy they can muster when we do get a turn around (which may occur after being range bound at the bottom for a while). | |
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Crude makes new low...
