dcsimg
Blog
September 23rd, 2008

Despite Market Unpredictability, Oil Set Daily-Gain Record

by

 

Crude-oil futures made history yesterday surging as much as $25 a barrel, the highest one-day gain since 1984, as investors took advantage of the opportunity to seize up one of the few remaining profitable investments:

It all just “underscores that energy is the only place to expect outsized profits these days and the money is flocking into that market,” he (Neal Ryan, a managing partner at Ryan Oil & Gas Partners) said.

“Clearly the money out there needs a place to go, and oil is now a major safe haven,” said Michael Lynch, president of Strategic Energy & Economic Research (SEER).

Yesterday’s one-day record had some analysts puzzled due to the market’s current state of uncertainty, and how it should translate into lower oil prices, rather than rising to record-setting levels:

“If the economy is so bad and uncertain and panicky, [the] price per barrel should be deflating like crazy because demand is cratering,” (Anthony, a professor of law at St. John’s University, whose legal practice includes oil and gas law) Sabino said.

It’s a “wholly illogical disconnect,” Sabino said. With the U.S. stock market down by so much and money tight, logic says oil demand will “continue to drop like a stone, so prices should be back at $90 and heading south to $80.”

Today, crude futures fell 2.1% to $107.10, as Fed Chairman Ben Bernanke and Treasury Secretary Henry Paulson gave their testimony before the Senate Banking Committee about their proposed $700 billion bailout. Many investors remain leary over whether or not the massive bailout will avert the continued economic decline that has already, and would continue to, put a serious crimp on consumers’ ability to spend on gas — hence, driving down consumption and prices along with it.

Share and Enjoy:
  • email
  • Print
  • RSS
  • Add to favorites
  • Yahoo! Bookmarks
  • Facebook
  • Twitter
  • Technorati
  • Digg
  • del.icio.us
  • Google Bookmarks
  • StumbleUpon
  • Yahoo! Buzz
  • Mixx
  • BlinkList
  • Live
  • Reddit

Leave a Comment

Receive Updates via Email

Delivered by FeedBurner

About the HSH Blog

HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

Our bloggers:

Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

Connect With Us

  • rss feed icon
  • facebook icon
  • twitter icon

Compare Lowest Mortgage Rates

$