Wednesday, April 04, 2012

Simply rubenesque.

"Oil tumbled after the Energy Department said U.S. stockpiles surged the most since 2008 as domestic crude output climbed to the highest level in 12 years.

Futures fell to a six-week low as inventories rose 9.01 million barrels to 362.4 million last week, the most since June. "
From Bloomberg.

You remember last week I was ranting about the oil stockpile surge. Well, this week we get an even bigger inventory surge. Honestly, I don't know what it is going to take before people start to understand that gas prices matter. It doesn't matter what your agenda is. This is the third time gas has gone above 4 bucks. And this will be the third time it has caused contraction.

It's an immediate tax that people can not avoid.

And judging from what I am seeing on the road, next week might be just as "surgey".

"U.S. inventories are obviously more than ample,” said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis,"

This is the good part though:

"Supplies of crude were projected to rise 2.5 million barrels, according to the median estimate of 11 analysts surveyed by Bloomberg."

In the past two weeks analysts have been wrong by roughly 10 million barrels. Normally I might give them a break because the median for the year has been roughly 2.5 million barrels a week. But really, they get so little right lately. And by lately - I mean the last four years.

All you have to do it look around. When I am sitting a stoplight in California, and I don't see any cars for two or three full traffic lights - it starts to turn my stomach a bit. Because we have three perfect examples of what will come.

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