Just another head fake from our mastersWith the situation in Europe getting worse before winter even arises the powers that be are trying to push recession as a big reason to get rid of oil and gas companies. While I find this as just another head fake I suppose there are those that believe oil is really going down to $70 or $50. But, consider what happens when Russia turns off the spigot and winter weather comes. This is a couple paragraphs from an investment newsletter:
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Here’s another example. Last week an oil buyer bid $5.85 over the spot price for Brent crude oil. That’s the highest premium to spot offered for a purchase of North Sea oil in at least 14 years… and the bid received no takers. On the same day, the Brent oil price crashed more than $7 in the financial markets… to below $100 a barrel.
Again, this makes no sense… how could the spot market for oil be so tight while the paper market for oil plummets on the same day? The answer is simple.
Energy buyers in the physical market for oil are desperate to secure supplies. But in the financial markets, traders are trying to price in a coming recession."
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Once again the paper market tail wags the dog of reality. Keep buying these good O&G companies.
T