chinton, weather and energy/pm's,
"Some analysts say crude oil prices could reach $60 a barrel, double last year's prices, if supplies were suddenly interrupted or the winter were very cold."
Well, my preliminary winter forecast, which predated any others I have seen, said colder than normal east of Rocky Mountains or Mississippi, possible exception New England. Joe Bastardi has the line right between Rocky Mtns and Mississippi, with Mid Atlantic 1-2 degrees below and Southeast 3 degrees below normal. With NOAA generally agreeing (now that could be construed as a negative, ggg) with Joe and myself, I wouldn't be counting on too many balmy episodes as we had last winter in the eastern US.
BTW, the vast majority, 90% of HO users are in PA and Northeast, while only 7-8% of total US households heat their homes with Heating Oil. Many of the newer plants and factories use Natural Gas for heat/steam used in manufacturing in the region. Most of these newer plants use HO as a backup in case NG becomes tight and they are restricted in NG use so that the residential market can be ensured. This occured during Jan/Feb of 2000 (or was it 2001?) and caused a boost in HO usage.
Finally, for energy and PM's in general, I believe we have entered a period that is analogous to the 97-2000 internet/high tech era. My thoughts are that the bull market will last longer than most believe, an extension of trend.
Backing this up is a major difference, that the energy and PM's have fundamental strength as limited resources, something that is beyond the technical momo of the previous internet/high tech/telecom bubble bull market.
All bull markets end, how soon could the energy/PM bull market end??
I don't see it ending any sooner than January 05 at the earliest, with the outcome of Iraq elections and the general situation of Iraq and Mid East having great influence on the longevity of the bull. There are other factors of course, some major, but that is the bottom line, IMHO.
BTW, don't know if I mentioned it here, think I did, but remember CNBC saying damage from IVAN to energy infrastructure in the Gulf was, in so many words, not a big deal. At the same time I was seeing numerous reports on the newswire of drilling rigs being blown 90 miles.
As a contrarian, I can rely on CNBC, VBG.
Best,
Roebear |
