https://finviz.com/futures_charts.ashx?t=CL&p=m1
It's crazy how far it has risen from the Covid low. Did we have high inflation during the previous periods of high crude prices? I remember high gas prices but don't remember other things being expensive. Anybody remember the reason for the straight down drop after the peak in 2008?
Yep ... because the commodity idiots were broke and had to quit.Originally Posted by idbefishing
Each barrel was trading 27X before it was actually to an end user.
Don't let the price of crude make you think anything, it's futile.
Crude prices are in US dollars, worldwide. Should it change ...
rising prices of anything is inflation. People seem to think that inflation is only affected by gov't money printing. But inflation can be many things. A severe drought that wipes out crops will cause inflation. Vehicle prices are up, not because of the money supply, but because of a shortage of vehicles while demand for the vehicles are as high as they always have been.
The steep rise and dramatic fall of oil in 07 and 08 was because of a booming economy, not enough supply to meet demand, then the beginning of fracking, increasing supply, followed by the financial crisis and both directions being exacerbated by trading. I remember talks of banning outright trading oil and only allowing those who can take physical delivery being allowed to buy and sell futures. Traders were using ultra leveraged products on oil prices. Not only was each barrel of oil trading 27 times as Tampa describes, but there were 3x leveraged ETFs controlling the price of that barrel and then on top of that there was options trading that would give you 100x leverage on top of the 3x ETF.
Now theres another issue with oil that we are just beginning to see the affects from. Lack of investment in future oil production. Investors in the oil companies are demanding a change in how oil companies spend cap-ex. Oil companies are spending more and more money on renewable energy projects and less on oil exploration and production. Crazy to think, but the big oil companies are building massive solar farms around the world. Shell is now building renewable energy charging stations instead of gas stations. Who saw that coming?
Thanos was the hero
Check this out, energy is leading
https://www.cmegroup.com/trading/equ...or-index.html#
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