On CNBC this afternoon (October 1, 2010), we get word that price of oil could go up another six (6) percent and/or we could even see double-digit increase in the price of oil in the near future. Or something like that; I forgot to write it down as it was being reported and now I'm writing from memory. The feeling is that a pick up in the global economy is accounting for the bullishness. [I understand that someone on CNBC's Fast Money today said oil could go to $100. These were the same guys that said oil was overpriced a few months ago, and that fundamentals suggested oil should be at $20. Entertainers, they are.]
In addition, Oil and Gas Journal's senior editor wrote yesterday that the 2.7 percent spike in the price of oil was most likely due to evidence of an improving global economy.
The evidence of an improving global economy? The government revised last quarter's US GDP slightly upward, from 1.6 percent to 1.7 percent. Give me a break. Does anyone really believe a) this number is reproducible; b) statistically significant; or, c) could affect the price of oil this much?
If so, wait until there's a real uptick in the economy.
