tddrice

The today's phenomenon: Oil prices go down almost $1.50 to $58.50, but oil related companies trade higher Exxon, Valero, Suncor... Do stocks investors know better then commodities traders. One of the two must happen, either stocks (oil companies) will go down tomorrow or oil prices go up. Interesting, isn't it?

As long as China, India and other large emerging markets continue with GDP at or above 9%, any temporarily decline in US energy consumption cannot stop oil (energy) prices to move up. The mathematics is rather simple: assume the shortfall in oil consumption in the United States (3%?), compare it with the increase consumption in China, India and others (10%?) and you see still an surplus in the world's demand for oil. In addition, the OPEC decision the cut production will have to create some pressure on prices. One should always consider that some minor/major catastrophes (hurricanes, international political issues etc.) may arise somewhere, and we will have an immediate correction to current oil prices. Some oil/energy companies, therefore, seem to trade in attractive prices