Will $100 A Barrel Oil Lose Its Shock Value?

Oil at $100 a barrel could soon lose its shock value as weakness in other asset classes and fundamental strength lure investors and speculators.

U.S. crude on Tuesday leapt to a new high of $100.10 a barrel and for the first time closed above $100 at $100.01.

It previously touched $100 in intraday trade on Jan. 2 and broke through the level to $100.09 on Jan. 3.

Traders and analysts said there was no single reason for Tuesday's more than $4 a barrel move higher in tandem with strong moves on other commodities. Aluminium touched a nine-month high and copper hit a four-month high.

But they said the price rise, spurred as the market climbed through technical levels, was built on an underlying trend. It marked the end of selling oil short on the basis a U.S. economic slowdown could impact demand for oil and other commodities.

Keep Reading

See what others are saying about the ramifications of $100 oil in Business Week and Consumer Affairs

Comments

[realitytrumpsbull]

They can keep trading or doing whatever, if need be we can build steam-powered trucks. You can burn poop, paper, just about anything, and it'll do the job...get all Robert Fulton about this situation...

[Ginzaman]

No. The we-are-superior-Americans attitude who can drive anything we want will keep on going until gas goes up to roughly the same as the rest of the world ($8 a gallon). Then and only then will action be taken.

[WIpatriot]

"Will $100 A Barrel Oil Lose Its Shock Value?"

YES. I'm already not shocked.

[Rickter]

The oil companies are sort of like boiling a frog. If you drop it in a hot boiling pot, it will jump out. But if you slowly head the pot, the frog gets used to it and will boil to death...

The oil companies are just slowly turning up the heat on us, we get used to it... we bitch a bit, but get used to it.. and they hike it a little more. Slow and easy, no shock value - and slowly get screwed in the process.

[mmckinl]

Hello , anybody home ?

[mmckinl]

The stock market doesn't seem to mind ...

The problem is how do the 'powers that be' explain away rising prices in the face of slowing economies worldwide.

The gap between heating and driving seasons in winter has traditionally meant lower oil prices as has the gap between driving and heating in the fall. This has not happened and in fact prices have gone up both last fall and now. Oil was at around $55 last year at this time.

There can be only one conclusion. That is demand is outpacing supply. Since this time of year demand is lower we can only conclude that supply is in bad shape that is that peak oil is here or close.