Oil prices are hovering lower today, after failing to breach the $60 mark for three days straight. Therefore, we can conclude that oil will remain at this level ad infinitum, right? Think again, two petroleum market analysts told "Morning Call."
Independent trader Eric Bolling -- whom some of you might recognize from CNBC's "Fast Money" -- pointed to several elements that will render oil difficult to predict. Most obviously, the icy weather throughout America's Midwest and Northeast, which has finally caught up with the calendar -- and reversed the nearly surreal warmth of December and January.
Then, Bolling turned to "geopolitics," pointing out to CNBC's Liz Claman that most of the industrial world's oil comes from "the Middle East," where geopolitics is "ready to go at any minute." Last -- but definitely not least, with with some $1.5 trillion involved -- are the hedge funds. The trader said the funds on everyone's lips (one of them, Fortress Investment Group, is even going public tomorrow) "are in oil," and with all that money chasing a "finite amount" of the vital commodity, the price moves "are getting more exaggerated."
Craig Smith, CEO of Swiss America Trading Corporation, shares Bolling's perspective, adding a few reasons of his own. He brought up the fact that the once-granite U.S. dollar has itself seen plenty of fluctuation in this young century, affecting the price of global petroleum; and driving the dollar's volatility is the doubling of the price of gold. He seconded Bolling's point that China and India are combined with U.S. demand, and warned that Hurricanes Katrina and Rita revealed how sensitive the system is to disruptions. "Days of stable oil prices are behind us," Smith declared. "Days of 'buy rumor, sell fact' are now alive on the Street."
FYI-You can hear more from Eric Bolling on "Fast Money" at 8 pm M-F on CNBC. That's 8 pm Eastern time.