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Pricing crude oil out of the Dollar this Fourth of July...
SO THIS WEEK'S spike in the price of Brent crude oil to $73.50 was due to a
"rogue trader".
His unauthorized dealing
through the PVM brokerage reportedly sparked 30 times the typical trading
volume and incurred a loss of $10 million.
Whatever the regulators
missed this time, that spike hardly compares to last summer's run. But averaging
nearly $70 per barrel in June, the price of US
crude oil just matched its average monthly price of the last four years.
No, that's not much of a
recovery given the monthly top of $132 per barrel hit this month and last in
2008. And it's peanuts next to the record daily close of $145 hit on Bastille
Day, July 14th '08.
This Fourth of July,
however, and not least if you're out driving, spare a thought for just how
much more expensive crude oil and thus transport, heating, detergents and
plastics are today than back before the credit bubble morphed into the
financial crisis and then into today's global depression.
Also note how
the spike of '08 was only slightly tempered for European drivers and
households when the North Sea benchmark,
Brent crude, is priced out of Dollars and into the British Pound.
Whereas, if priced in
Gold – a simple enough concept amid rumors and counter-rumors of
Chinese grumping over the Dollar's volatility and the search for a new world
reserve basis – crude oil is now back pretty much where it was
throughout the low and falling trend of the late 1980s and 1990s.
Just a thought. Happy
holidays if you got any independence to mark.
Adrian Ash
Head of Research
Bullionvault.com
All
articles by Adrian Ash
City correspondent for The Daily Reckoning in London,
Adrian Ash is head of research at www.BullionVault.com – giving you direct access to investment gold, vaulted in Zurich, on $3 spreads
and 0.8% dealing fees.
Current gold price, no delay | FAQ | Detailed outlook for 2007
Please Note: This article is
to inform your thinking, not lead it. Only you can decide the best place for
your money, and any decision you make will put your money at risk.
Information or data included here may have already been overtaken by events
– and must be verified elsewhere – should you choose to act on
it.
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