Much to the delight of consumers and economists, oil and
gasoline prices have been steadily falling for
the past five months. In fact, both petroleum products are currently
showing double-digit decreases from their recent highs. It’s an
occurrence that is not only being credited with helping confidence, but
also with saving the holidays, since shoppers can spend money on gifts
instead of gasoline.
But that could all change, says Bill Baruch, senior market strategist at
iiTRADER.com, who’s in the midst of a year-end strategy he says works 8 out of 10 times.
“We like gasoline (
RBZ13.NYM). We’re getting our clients in,” Baruch says in the attached video.
“If
you buy (gasoline) in December and hold it through (first week of
January), it’s successful 82.6% of the time. For us it’s no brainer with
the seasonal play here,” he adds.
There are other factors that
are keeping this Chicago-based trader, and others like him, on edge
right now. Rising inventory data continues to reflect weak overall
demand, which is due in part to a sluggish economy and simple
efficiencies like smaller, more efficient cars.
And then there’s a logistical aspect to his trade too.
“There’s
also a big issue with getting the oil to the refineries,” he says.
“There’s not enough refineries. We haven't had a new refinery in 30
years. Refining the crude is the problem.”
And finally, Baruch
says, most investors are celebrating a party that doesn’t even really
exist by looking at the 13% slide in WTI or NYMEX crude (
CLF14.NYM), instead of the 5% dip in the price of the more globally watched Brent crude (
BZF14.NYM), which is still above $110.
“The
reality is, everybody is focused on WTI (West Texas Intermediate). You
have to focus on Brent. Our government even uses Brent as a benchmark.
What’s really moving (things) is the Brent.”
As he sees it, even
if OPEC holds off on trimming its output quotas tomorrow, high domestic
production, and backlogged refineries will serve as a floor in the price
of petroleum prices.
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One
of the most highly respected fund managers in Singapore spoke with King
World News about a stunning event that is about to completely alter the
war on gold. Grant Williams, who is portfolio manager of the Vulpes
Precious Metals Fund, also discussed how this war will ultimately end as
well as what all of this means for investors in gold. Below is what
Williams had to say in his powerful interview below.
