Skip navigation
Watchlist Sponsored By :


Current DateTime: 06:54:23 30 Nov 2009
LinksList Documentid: 33482595

Current DateTime: 06:54:23 30 Nov 2009
LinksList Documentid: 24355697
  • The Cost of True Love

      In the popular holiday song "The 12 Days of Christmas," the cost of gifts - from the 12 drummers drumming to a partridge in a pear tree - is quite pricey.

  • Runway Angels

      The superbowl of fashion shows, models walk down the runway at the 2009 Victoria's Secret Show.

  • Smartphone Guide

      Here's a need-to-know guide to nine devices, based on features, price, network and platform.

FEATURED QUIZZES


Current DateTime: 06:54:23 30 Nov 2009
LinksList Documentid: 33793611
  • Test Your Google IQ

      How much do you know about the most popular search engine in the world? Take the following quiz and find out.

  • How Well Do You Know Your Bird?

      Let's talk turkey. Test your turkey knowledge and perhaps pick up a bit of trivia to trot out at your holiday meal.

  • A Healthier & Wealthier You

      Take the following quiz and find out how much you know about the impact of obesity on the health of the U.S. economy.


Current DateTime: 06:54:23 30 Nov 2009
LinksList Documentid: 24890560
  • Holiday Central

      There are plenty of reasons to believe that this Christmas holiday season will not be as bad for retailers as last year.

  • Winterizing Your Portfolio

      If 2009 was the winter of our discontent, will 2010 be a winter wonderland for investors? A lot depends on the recovery—or lack thereof.

  • Investor's Guide to Real Estate

      Some even say the long-awaited recovery is here. Regardless, buyers and sellers alike can profit from our guide.

powered by digg
For Oil, $100 May Be Just a Pit Stop Along the Way
By: Jeff Cox, , Special to CNBC.com | 20 Feb 2008 | 01:53 PM ET
Text Size

Welcome to $100 a barrel oil and enjoy your stay. You're likely to be here a while.

oil prices, energy prices
George Osodi / AP
An oil refinery in Nigeria, site of political violence that has sporadically hampered oil production.

Light, sweet crude passed the century mark Tuesday and closed above it for the first time, setting off speculation about just how high prices could go and where a realistic level of support may lie. Once considered an impossibility, such prices are now a fact of life.

"I certainly think it's a harbinger of things to come. Yesterday's spike was for a multitude of reasons ... and we have to understand that none of these things are going to go away," said Kevin Kerr, an analyst at Resource Trader Alert. "Really this is probably just a stopping point on the way to $120 a barrel."

The surge in oil [US@CL.1  Loading...      ()   ] has come on the heels of various factors -- some purely speculative, but others fairly fundamental.

Commodities in general have been booming as stocks remain mired near bear-market levels, and bond yields fall as investors flock to Treasurys for safety.

But in oil's case, there are other factors: Geopolitical tensions in Venezuela and Nigeria threatening supplies; higher demand with peak driving season on the horizon; and recalcitrant officials at the Organization of Petroleum Exporting Countries who are vowing to defend an $80 a barrel baseline.

Trader Talk with Bob Pisani:

Like other commodities, oil will have some volatility -- the price Wednesday at one point dropped more than $1 a barrel before rising again. But the OPEC stand and its accompanying pledge not to increase production despite a surge in costs has most analysts convinced that oil has found its range and is unlikely to back off anytime soon.

"There's some speculative buying definitely contributing to this," said Ray Carbone, of Paramount Options.

"I think (the price) is showing a very, very tight market in general and it shows that no matter what the economic numbers are -- and they have been slow and a little bearish on demand -- supply concerns will always trump bearish numbers."

Oil's price reverberates through the economy because of Americans' reliance on it to fuel their cars and heat their homes and businesses.

The surging price, combined with a higher-than-expected reading Wednesday in the Consumer Price Index, helped stoke inflation fears that could dissuade the Federal Reserve from further interest rate cuts.

"Oil at $100 a barrel right now is going to really kind of put the final nail in this coffin," said Ben Lichtenstein, of Traders Audio. "If we're teetering on a recession with oil sustained above $85 a barrel, what's $100 going to bring right now? Again, $100 is just a little speed bump right now. We're on our way to $120 easily."

But Kerr, of Resource Trader Alert, cautions investors on how they play the oil market. Though prices seem enticing for going long on oil futures, he instead advises plays on undervalued refiners and drillers, citing Halliburton [HAL  Loading...      ()   ] and Schlumberger [SLB  Loading...      ()   ] as possible moves.

Also on CNBC.com

"Oil's something that can go back down, because I think the demand equation's going to hit us," notes Robert Wiedemer, author of "America's Bubble Economy." "I think the economy's going to continue to slow down and I think that's going to hit oil, and I don't think there's any way around that, so I'd be a little careful about playing on that side."

© 2009 CNBC.com
Tools:
Print EmailAdd This share icon
  • digg share

CNBC HIGHLIGHTS

  • Ever wished your cab driver would stop chatting and just get to where you're going? Well, that moment is closer than ever.
  • UPS truck
  • UPS is giving its customers the option to offset its carbon emissions when sending a package.
  • Romania's presidential campaign has been rocked by a video that may show the president striking a 10-year-old boy.
  • alligator
  • Raising alligators is hard work, and the fickle taste of rich consumers has just made it much harder, says the NY Times.
  • A recent issue of ESPN Magazine was one of its top sellers ever, and it only took scantily clad athletes to make it happen.
  • The continued real estate boom in China is partially fueled by a generational flood of newlyweds.
ADD COMMENTS
Remaining characters


Current DateTime: 05:22:43 30 Nov 2009
LinksList Documentid: 29778428

Current DateTime: 11:44:56 30 Nov 2009
LinksList Documentid: 29779196

Current DateTime: 05:55:24 30 Nov 2009
LinksList Documentid: 29779199

Current DateTime: 11:23:57 30 Nov 2009
LinksList Documentid: 29779198
  Data is a real-time snapshot  *Data is delayed at least 15 minutes
Global Business and Financial News, Stock Quotes, and Market Data and Analysis

© 2009 CNBC, Inc.  All Rights Reserved.
A Division of NBC Universal
Thomson ReutersThomson Reuters