Archive for Commodities

Oil Prices Creep Back

There is a lot of debate whether the oil will come back or not to the levels from 2008 (mostly May and June levels, where it reached a peak of $140/barrel. Since then, it continued to drop until February 2009, since it started again to grow. This time, in a much slower manner.

It is true that the recent economical news are slightly better than the previous ones. The US GDP has decreased in quarter 3within the economists expectations. The important word here is “decreased”. And the S&P 500 companies have seen a small recovery. Yet, I think we are several months from the economic recovery whcih could turn recession into a growth trend.

And of course, there is a debate of whether oil prices will anticipate these oil price increases or whether it will go down further, before it picks up. Read more

Will Further Interest Rates Reductions Boost The Economy?

Well, our survey has different views included, as usually. The answers tend to be pretty structured though, so let’s see the results.

The theory, as previously explained by doitinvest.com in a previous investing blog, says that the interest rate cut executed by the FED should boost the US economy. By reducing the refference interest rate, FED actually reduces the borrowing costs of the US banks. This is because the banks attract an important portion of their cash through loans from FED at the official interest rates. obviously, the lower the refference rate is, the lower the costs for the banks, which in turn are encouraged to lend money at smaller costs. The ultimate beneficiaries in this lending chain are the final consumers/companies, which should benefit from borrowing facilities available at lower costs. Read more

Why does the oil price continue to go down?

Well, that is an interesting question I think – and it shares some of the reasons why the Detroit auto makers are now desperately looking for a bailout from the US government similar to the banking ones.

 

For a long time, OPEC countries though to be the masters of the moving universe. These highly power-concentrated countries have names which resound like a big mantra for some and a big curse for the others – Venezuela, Saudi Arabia, Iran etc. They base all of their fortunes on oil supply and the founding of OPEC was done to control the oil supply and to make them richer.

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Gold gains luster again

What are the investors turning to when they can’t buy shares anymore? Well, to gold and to raw materials – because these assets are counter-cyclical.

And of course, now its the moment when can sell futures on the gold price – if you think it is going down, or to buy – if you think that the investing crisis will continue for a while. Read more

What does the current oil price mean for the investors?

Everybody knows that from the beginning of this month the oil price has breached a new record:

Oil soared by more than $6 a barrel to over $134 on Friday June 6, bringing gains in the last two days to $12 as the dollar weakened further on a jump in the jobless rate in the United States.

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