The Energy Report for Friday June 13, 2008
Energy Report
by Phil Flynn
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2008-06-13
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What the Friggtriskaidekaphobia is going on? Or should I say paraskeidekatriaphobia? Well oil bears probably have come down with a bad case of that malady and might freak out especially if a black cat happens to cross their path. (Or if oil crosses the $140 resistance) The Fear of Friday the 13th is permeating the world's petroleum markets and controlling the very dark parts of every traders mind... Well ok maybe it's not fear of Friday the 13th but the markets are running on fear. Even more fear than Kevin Bacon had in Friday the 13th. Yes we are talking 6 degrees of Kevin Bacon here what do they have to fear so anything could happen. Yet the fears that drove the market seemed to come out of Nigeria.
First there was a report from Bloomberg that Nigerian National Petroleum Corporation took over operations in the Ogoni district of southern Nigeria from a Royal Dutch Shell joint venture. Nigeria's President Umaru Yar'Adua said the move might calm down unrest from local residents.
Of course the move did not calm down a energy market that is as fragile as nitro glycerin when it tries to sell off.
If that wasn't enough to blow the correction to smithereens then another Nigerian Headline might have done the trick.
Strike talks between Nigerian oil workers and Chevron s oil workers seemed to be breaking down which might mean that that precious sweet crude could be taken off the market. This market wants sweet crude and Nigeria oil is prized
Of course oil may fear what may or may not happen with the dollar and what inflation fighting measures may come out of the G-8. Over Night Dow Jones reported that Japanese Finance Minister said he spoke about currency issues with US Treasury Secretary Henry Paulson or Hank as I like to call him but they offered no details. Still just because they talked about it means the market is expecting them to do something about it as talk is cheap and the dollar is cheaper. Cheap dollar more inflation either raise rates in the US or the G8* needs to move to support the currency. The Dollar likes it.
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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 388 issues.Our users give the newsletter an average rank of 8.4/10 (24 votes)
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