Oil trading suspended. (Actually a good thing)

[Kurt_and_Hunter]

I amposting this in GDP because the folks in here are less bat-shit crazy... I am afraid of GD.

They just suspended oil futures trading for the day after a 9% increase.

That is actually good news. It's a "short-squeeze" rally. One determinant of oil futures is predicted economic activity. A global depression would cut oil use a lot.

So the global-collapse bettors in the oil market are getting squeezed today. So that's a net vote for economic growth.

[DemocratSinceBirth]

1. If The Economy Is Going Into Recession Why Wouldn't Oil Futures Go Down

On the belief there will be less demand...

What am I missing?

[Kurt_and_Hunter]

6. That's the point. Folks are more optimistic about future growth.

Traders laid in big shorts on oil, predicting a global collapse. Others, predicting better growth, piled in and squeezed the shorts.

I like cheaper oil, but not if it's cheaper because people expect a depression.

[DemocratSinceBirth]

8. Did I Miss Something?

It seems the likelihood of future worldwide economic expansion is not greater than the likelihood of future worldwide economic contraction...

[Kurt_and_Hunter]

12. It's relative. If Oil was pricing in depression, but now sees mere recession...

The cratering of oil was one factior that has really been scaring me.

In the 1970s you watched copper because it was used in almost all aspects of construction and manufacture.

With all out plastic stuff today, oil is now the big predictor of manufacture as well as power and transportation.

[WeDidIt]

2. Meanwhile the DOW is now down 230

The roller coaster ride on Wall Street is far from over.

[PermanentRevolution]

3. #1 on the list of "Phrases you'd never expect to see on DU..."

"I am posting this in GDP because the folks in here are less bat-shit crazy..."

[Jennicut]

5. They are flipping out over the bailout.

I am angry too but they are freaking flippin.

[snooper2]

7. I started lmao when I read that line

:rofl:

:hi:

[bluestateguy]

4. Tell those screaming yo-yos on the trading floor to STFU

to sit down, keep quiet, and go back home and play Dungeons and Dragons.

[uponit7771]

9. Oil futures going UP cause weak ass'd dollar due to overborrowing....this isn't good at all

[Kurt_and_Hunter]

14. Posible, but the oil up move looks way out of scale with dollar decline

Yes, dollar is inversely correlated with oil, but the dollar isn't doing so baddly this week.

(We are up vs. the pound (as of yesterday), for instance, probably because we ahead of the rest of the world on the disaster curve... the UK hasn't even begun to get the brunt. Thay are crying because UK housing went down 3%! Man... I'd pay for down only 3%)

[uppityperson]

10. Naw, people in GD and GDP are batshit crazy in different ways.

and at different times. Off to check market.

[orwell]

11. Without seeing the COT...

...it's hard to tell if it's a short squeeze.

There will be money coming into commodities in a direct response to the world's growing uncertainty over the dollar. What is the dollar really worth if the Treasury and the Fed are willing to change the rules of the game at a moment's notice and inject huge quantities of base capital into the global finanacial markets at the drop of a hat? Money means nothing but food and oil still do.

As far as global growth, that seems like a stretch. By any account growth will be impacted over the next 2 to 3 quarters. That is if we are lucky.

[uponit7771]

13. RIGHT!!! Feds dilute dollar value but throwing tons of it on the market for Wall Street...

[Kurt_and_Hunter]

15. But then USD$ futures should make similar moves

I see the monetary angle, and it's surely a factor, but the $USD isn't collapsing. It could, but a swap or flight to safety or whatever show show at least some trading symmetry.

But I reserve the right to be wrong.

[orwell]

16. Gold is up substantially since bailout rumors were announced...

...and the dollar is well off it's recent bear market rally highs.

China is also making some pretty nasty noises about the US economic situation. The is actually talk now about a non-US financial system. Dollar hegemony is starting to unravel in some very significant ways from South America to Asia to the Middle East.

I'm wrong all the time and I've been trading markets on and off for 25 years. :hi:

[BumRushDaShow]

19. Gold's up almost $30 per troy ounce, although that might stablize. n/t

[K Gardner]

17. I just filled up my tank at $3.59 - the rest of TN is in Oil Panic and there's a "run" on gas.

[Statistical]

18. Money flowing into oil futures is "dumb money".

Money flowing into oil futures is "dumb money".

People are trying to money their money somewhere safe. Nearly $7 trillion has fled the financial sector. The money has to go somewhere. Treasuries were first hit. Prices spiked and yields dropped to <3.5%. Now money is flowing into commodities.

In a destruction of wealth caused by paper valuations (which were wrong) it is reassuring to move money into something solid.

The dollar will fall so just taking money out of the market means you are not protected from inflation losses.
Sure the actual $ amount of your savings won't go down but the buying power will.

So oil rally is not based on any economic expansion rather a "flight to quality".

[leftist.]

20. This thread is very informative. Thanks DU! n/t