• 2 days PDVSA Booted From Caribbean Terminal Over Unpaid Bills
  • 2 days Russia Warns Ukraine Against Recovering Oil Off The Coast Of Crimea
  • 2 days Syrian Rebels Relinquish Control Of Major Gas Field
  • 2 days Schlumberger Warns Of Moderating Investment In North America
  • 2 days Oil Prices Set For Weekly Loss As Profit Taking Trumps Mideast Tensions
  • 3 days Energy Regulators Look To Guard Grid From Cyberattacks
  • 3 days Mexico Says OPEC Has Not Approached It For Deal Extension
  • 3 days New Video Game Targets Oil Infrastructure
  • 3 days Shell Restarts Bonny Light Exports
  • 3 days Russia’s Rosneft To Take Majority In Kurdish Oil Pipeline
  • 3 days Iraq Struggles To Replace Damaged Kirkuk Equipment As Output Falls
  • 3 days British Utility Companies Brace For Major Reforms
  • 3 days Montenegro A ‘Sweet Spot’ Of Untapped Oil, Gas In The Adriatic
  • 3 days Rosneft CEO: Rising U.S. Shale A Downside Risk To Oil Prices
  • 4 days Brazil Could Invite More Bids For Unsold Pre-Salt Oil Blocks
  • 4 days OPEC/Non-OPEC Seek Consensus On Deal Before Nov Summit
  • 4 days London Stock Exchange Boss Defends Push To Win Aramco IPO
  • 4 days Rosneft Signs $400M Deal With Kurdistan
  • 4 days Kinder Morgan Warns About Trans Mountain Delays
  • 4 days India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 4 days Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 4 days Russia, Saudis Team Up To Boost Fracking Tech
  • 5 days Conflicting News Spurs Doubt On Aramco IPO
  • 5 days Exxon Starts Production At New Refinery In Texas
  • 5 days Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 5 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 5 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 6 days China To Take 5% Of Rosneft’s Output In New Deal
  • 6 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 6 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 6 days VW Fails To Secure Critical Commodity For EVs
  • 6 days Enbridge Pipeline Expansion Finally Approved
  • 6 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 6 days OPEC Oil Deal Compliance Falls To 86%
  • 6 days U.S. Oil Production To Increase in November As Rig Count Falls
  • 6 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 7 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 7 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 7 days Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 7 days Aramco Says No Plans To Shelve IPO
Alt Text

Has The Bear Market In Oil Finally Ended?

Recent data provides reasons to…

Alt Text

The “Amazon Effect” Is Coming To Oil Markets

The move toward using software…

Alt Text

Kuwaiti Minister: OPEC Deal Extension May Be Unnecessary

Kuwaiti Oil Minister Al-Marzouk has…

Bruce Krasting

Bruce Krasting

I worked on Wall Street for twenty five years. I was an FX trader during the early days of the 'snake' and the EMS. Derivatives…

More Info

Will Oil Break Out Soon

Will Oil Break Out Soon

Jon Hilsenrath (WSJ) has yet another article on Fed propaganda to ease the way to QE-2. Today it was Chicago Fed boss Charles Evans doing the talking. He is in love with the Fed stuffing its balance sheet further.

He favors "much more [monetary] accommodation than we've put in place."

It’s hard to imaging being more accommodative than the Fed is today. We have ZIRP. We have nearly daily POMO. Rates have never been this low. Ever. We have broken some golden rules on monetization. And Evans thinks we need “much more”?

The Fed might aim to overshoot its informal 2% target for a time to make up for lost ground, Mr. Evans said. "That is a potentially useful policy tool at this point and I definitely think we should study it more,".

All the Fed heads are talking about the need for more inflation. This is nuts. The Fed is in a tiny box and saying, “Deflation is BAD”. If that is true then the opposite, “Inflation is GOOD” must be true. That logic is going to backfire.

There is possible bright side to this. Judging how quickly markets adjust I think there is a possibility that in a relatively short period of time, say the next four months, we have a shake out in oil. It would not take much. All the pieces are there. There is economic growth globally and the dollar is being trashed by the Fed on a daily basis.

I don’t think the average American gives a damn about the dollar. But they care very much about the cost of gas. If we get a price break and the pump says $4.00 and heating oil is $3.00 there will be a backlash. On a broad basis people will be angry. The economy will suffer. Our trade balance and current account will deteriorate. GDP will decline.

At that point the MSM will look for answers. They won’t have far to look. They can blame Mr. Evans or Mr. Bernanke. $120 oil and $4 gas will be brought to you by the Fed. From Hilsenrath’s article, the understatement of the year:

It could be a challenge for the Fed to explain such a strategy, and to convince the public that it wouldn't allow inflation to get completely out of hand.

I can’t wait for Fed officials to explain to Congress and the American people why trashing the dollar and raising the price of energy is good policy. They won’t be able to.

By. Bruce Krasting




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News