The oil market finally decided to join the commodity rally after spending most of the week on the sideline. The power of the Fed cannot be ignored forever as the threat of stimulus is always lurking around the corner. With most other commodities putting in strong performances, oil and the products followed but only reluctantly. Some say the durable goods number was the catalyst or strong data from Germany yet more than anything was the rising tide of all commodities that floated the oil market boat.
Natural gas is collapsing as the weight of oversupply begins to take its toll. With Gulf storms seemingly not a threat to supply and the fact that a falling dollar really does not matter that much to this market, gas could start to fall even harder. The trade likes to play crude off of the gas market and that should lead to further downside pressure.
Do you remember when OPEC seemed to matter? Dow Jones reports that the Organization of Petroleum Exporting Countries is unlikely to change production quotas at its next meeting in Vienna, scheduled for Oct. 14, as current oil prices are "comfortable," Kuwait's Oil Minister said Monday. Sheikh Ahmad Abdullah Al-Sabah added that he isn't concerned about global crude oil demand but is worried about production compliance by OPEC members. "I am worried about the quotas. The OPEC should be more committed to their quotas. There are little bit slippages here and there," Al-Sabah said.
When the Beverly Hillbillies discovered oil and had wealth far beyond their wildest expectations it never changed them! Will it change Brazil? Dow Jones reported that Brazil's President Luiz Inacio Lula da Silva said Friday the country is prepared to cope with the influx of wealth from massive offshore oil discoveries and defended the government's strong role in the economy. "What we have in our hands is greater than all the opportunities that have been thrown up by our history," Lula said in a speech at the Sao Paulo stock exchange to mark the largest share issue ever by the government-run oil company, Petroleo Brasileiro SA . Brazil is in an exceptional position because the discoveries come at a time when its economy is strong and it has a solid industrial base, Lula said. The injection of fresh capital is a "safeguard" to prevent Brazil's oil wealth from being squandered, and that the proceeds would create long-term prosperity, helping to eradicate poverty and improve education, he said. "A weak state has never been synonymous with strong private initiative," Lula said. Lula, who steps down at the end of year after eight years in office, criticized those who'd accused him of being anti-capitalist. "It is precisely that devourer of capitalism who leaves the presidency of the republic, after eight years, as the president who, is honored to have participated in the most auspicious moment in world capitalism," Lula said. So there!
Phil Flynn is senior energy analyst for PFGBest Research and a Fox Business Network contributor. He can be reached at (800) 935-6487 or at firstname.lastname@example.org