It's been a while since we've caught up with oil prices - latest graph above showing both the Brent and the WTI spot prices since 2005. Prices slid in early 2012, presumably mainly on Eurozone fears, but then rebounded as it became clear that the ECB was willing to do a lot to ensure that peripheral debt markets wouldn't spin too far out of control.
Now markets have been trending down again since mid September. The stock market has been doing the same thing:
suggesting that the issue is fears of economic weakness, rather than anything specific to oil markets. Here the drivers are likely to be slowing of China's growth, the upcoming "fiscal cliff" in the US, and poorish earnings reports from public companies.
What do you think about this?
ReplyDeleteIt's quite wierd for me, but the model well predicts Fed rate and Stocks.
http://seekingalpha.com/article/313269-oil-pricing-and-valuation-solved-a-required-yield-theory-mechanism#moderated-comment-1181791