I'm not overly impressed with the recent media coverage of oil prices. I don't think OPEC has changed much in their price and volume quota targets in a while... and pretty much all that we've seen in a long time is normal variation about the $75 mean. Clearly price was moving a bit too far when it edged past $85. I've continued using $75 as the base case in my efforts in analysis as prices edged higher... and didn't, and don't, see any need to correct them now. I think the media touted estimates I've seen for low side prices, now that they are correcting, are improbable.
There is some obvious noise in the data now, that has a couple of obvious disconnects becoming apparent between the various supply figures depending on the level in the process you look: oil inventories are up... while gasoline inventories are down significantly... and the logical disconnect between low supply in gasoline, and the expectation of lower prices at the pump ??? The media seems not too concerned that the logic actually work.
I do think there is likely going to be something like a one month delay in the start of summer driving season... as a function of the weather patterns being either problematic, or about that much behind... depending on where you are.
What I don't see happening now is the the same sort of "shock" generating a big impact on real economic activity, not seeing any of that sort of result from the current market decline as happened in early 2009... in part because expectations and capacities or tolerances have each been rebalanced since then... people are more inured to the news than shocked by it, now.
I don't think the current decline is going to deliver the same sort of systemic and social/psychological shock as that last year did... even with an equal or greater downside risk in market prices...
Of course, who knows... given the flocks of black swans with loose shoe laces that seem to be flying all over the place...
Won't go into the details of all the thinking behind mine... but, if (or as) stock prices drop this summer... I'm thinking this decline is likely to be a part of "the" buying opportunity of a lifetime...
Not that many policy options to play with from here... and fewer yet if things do get even worse... and those policy choices that do exist don't suggest we're going to have any major problems with deflationary risks, here. In Europe, I don't think they need to "fix it now" to solve their problems... but, they do need to show they'll decide to stop being clueless bozos depending on wishful thinking for positive outcomes. If they come to grips with the need to resolve big picture issues with the design (or lack of one) for coherent, rational, and ACCOUNTABLE governing or coordinating structures... the market will forgive them their recent head up butt syndrome. The problem with that, is that what they have now makes it almost impossible to do any thing quickly, and, without a driving force moving them to reformulate the entire thing... properly... to make the process responsive to elections, etc., and to give it a solid and principled constitution ??? They DO need to lay out a road map for addressing the issues, and show they've started down the path... toward something like a constitutional convention... or things there could begin to spin out of control in a few months.
I'll still be looking to buy shares in solid junior resources stocks if stock market prices do head deep south again... expect to be incrementally greedy if price declines accelerate a bit too much... but, I think we'll likely have a different view of things as early as in a month or two... and you might begin to note significant divergences in the shares, then, that have financials continuing to suffer given the uncertainties we face affect them more than others, while resource stocks are likely to stage an earlier rebound... my focus still has me looking at junior oil and silver producers.
JMHO...
.JPG)
.JPG)
Market Data 
Markets 
