BLACK GOLD

My good friend, Ed Stavetski, on one of thestreet.com pay sites, discusses his view on the oil debate- an excellent read for those taking the dark (short) side of the energy trade.


"The activities over the weekend regarding hostile activities in Nigeria only reinforce the view that the energy markets are a much more complex calculation than a simple current inventory sum. The dynamic now includes not only the U.S. and OPEC but emerging market countries and production in areas that are at best politically unstable. Add that to the fact that much of the OPEC supply is in hands that can best be described as volatile. National security, lack of alternate sources plus little in the way of discovery in the past few years is adding a large premium to the simple view of supply and demand. As I have indicated before, I do not see oil at $100/bbl any time soon, but OPEC seems to be prepared to defend at least $50/bbl. At any level in between, oil producers and refiners will see cash coursing through their corporate veins, which should also get reflected in their share prices."