July 16, 2008 11:03AM
All Eyes on Oil
By Alexis Glick
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Are you watching oil? As we speak it’s down almost another $5 dollars after the release of the weekly inventory numbers. Yesterday oil prices had there single largest decline since 1991. What has suddenly changed in two days? Not much. OPEC did cut their demand projections once again for the next couple of years and the weekly data showed an increase of 3 million barrels. The expectation was for a drop of 3 million barrels. What does this tell you? Demand is abating and that is finally giving oil relief.
It may only be in the short term but this is huge if we can sustain it. One other point that I want to make that I discussed with a couple Economists this morning. Investors have a much smaller weighting of equities in their portfolio this time around as opposed to the early 2000-2001 recession. At that time people held as much as 70% of their assets in equities, today that number is closer to 30-50%. As more investors and consumers look to liquidate funds or decrease their exposure, they will pull money away from the things that are working just as much as what hasn’t worked. What did they invest in this year? Commodities! Look for some withdrawals even in commodities and ETF’s that are benchmarked against those commodities. Investors hopefully learned a lesson during the tech bubble. Will they take those lessons learned and pull back their investment in the commodity move or as some suggest the commodity bubble? Stay tuned!
This morning I talked to three excellent guests, all well respected economists and professors, about the current state of the economy. Ed Van Wesep, University of North Carolina economist, Dr. Kent Moors, Director of The Energy Policy Research Group and a professor at Duquesne University and Laurence Kotlikoff, an economist at Boston University. Take a look. It was one of my favorite interviews since this network aired. They spoke frankly about where we are and where we are headed.
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Retail gas has finally the mark of 4.04-4.08 in the non competive market of Vicksburg Ms.
I’ve been watching the oil market for sometime and I heard there was another drop in the barrel price just a few minutes ago. On the Jay and Dave show on Supertalk Mississippi out of Madison,Ms they have been following the gas prices through out the state. Smaller places tend to price highers than others too. But Gov Barbour wants drilling off the coast big time. What does that mean? For more oi rigs it means more jobs can be generated through the southeast coasts. LaTourneau on the harbor Project here in Vicksburg Ms builds oil rigs. And the more jobs generated–the more revenue.
But drilling off the coast has caught on here too. Demorcatic Senate Candidate Ronnie Musgrove came on on his Youtube site expressing the fact he’s against drilling in Anwar. Real stupid posistion to take in the poorest state in the union where gas prices are high.
Kroger is getting close now to have thier gas pumps up and running soon too. The locals here are looking forward to it; the Waring Clan has been quiet on the retail gas issue. No public statements or anything. Over two years ago one my associates told me an interesting story involving Waring Oil. A competitor out of Clinton Ms wanted to open a gas station here and he was told he had to price it. Now Waring told him this and the competitor left. Here’s another story I learned too. Someone else watned to to open gas station here too and in a public restraunt it’s believe one of the Warings said this to the competitor.”I set the gas prices in Vicksburg.” Of course the competigor laughed his socks at him. But this how the Warings have been playing the game down here for so long. I’ve heard more stories about them like the fact of delivering gas to Jackson at a cheaper price. That’s just some of tbe business hypocrisy that has been going on. Another story I heard that Waring made mistake with elements of gas when they made delivery on the Gulf Coast.