Big Bad Ben Bernanke
Energy Report
by Phil Flynn
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2008-08-25
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Magic words from the Fed Chairman sent oil futures tumbling on Friday as it seems the energy complex is more apt to ignore weather and geo-political events in favor of words from the Fed Central Bank Chairman. And there's talk a Korean Bank may buy Lehman Brothers.
It is obvious that oil is focusing on things much more complex than simple supply and demand and is looking on the larger issue on the state of the economy. The market is being driven by the dollar and central bank policy and issues like war and supply/demand take a back seat.The largest moves in oil seem to come on macroeconomic stories as opposed to stories about supply and demand. The fate of the economy and the fortunes of dollar seem to have more of an effect.Thursday's sharp historic gains seemed to be erased in a blink of an eye.Ben Bernanke said that the fall in oil prices and the rally in the dollar were encouraging but what seemed even more encouraging is the perception of just a little less risk on the investment banking side. Yet still we see other banks fall like flies.
Bloomberg News says that Columbian Bank and Trust Co. of Topeka, Kansas, was closed by U.S. regulators. This is the nation's ninth bank to collapse this year amid bad real-estate loans and writedowns stemming from a drop in home prices.The bank, with $752 million in assets and $622 million in total deposits, was shuttered by the Kansas state bank commissioner's office and the Federal Deposit Insurance Corp, the FDIC said yesterday in a statement.Citizens Bank and Trust will assume the failed bank's insured deposits. Columbian Bank's nine branches will open Aug. 25 as Citizens Bank and Trust offices, the FDIC said. Customers could access their accounts over the weekend by writing checks or
using ATM or debit cards. ``There is no need for customers to change their banking relationship to retain their deposit insurance coverage,'' the FDIC said.
Fay may have finally gone away after a record four strikes on land but another disturbance is right behind it. Could Gustav be a new worry? The National Hurricane Center is warning that a tropical wave over the southeastern Caribbean Sea could turn into tropical storm Gustav. The National Hurricane Center says that this tropical wave continues to produce a large area of disorganized showers and thunderstorms and it could become a tropical depression. And what is more there is another disturbance as well but at this time does not to appear to be as big a threat.
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Phil Flynn
Phil is one of the world’s leading energy market analysts, providing individual investors, professional traders and institutions with up-to-the-minute investment and risk management insight into global petroleum, gasoline and energy markets.
Energy Report has contributed 212 issues.Our users give the newsletter an average rank of 8.4/10 (24 votes)
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