We’ll see oil at $80 before the Fed raises rates.
Boom. That should get your day started right. Aside from the Econo-head joke there, I’m sure the teeming millions are happy to see Chief Sitting Bull back in the saddle. This is what I do best because everything is falling into place now. Yesterday was a big deal and for what it’s worth, everyone was missing the boat. See, another thing I do is I pay attention to what’s going on in oil and the rest of the world.
I never staked a claim that OPEC was in a “price war." No way. I made damn sure that people knew that fracking in the U.S. wasn’t going to stop even when break even was supposed to be under $60. It was me who told everyone to, “R-E-L-A-X," this will come to pass. If anyone has any questions, just remember that back in 2009 when oil hit $34, we ended the year averaging $62. The only thing that oil has done in the past three months is bring back the sorely missed volatility.
Now lets get the real meat on the bones from yesterday. Stop listening to the TV and falling for the “U.S. dollar” correlation. The real rally in oil started when Obama announced we’re going to lift economic sanctions with Cuba. That my friends is huge. Although Cuba isn’t the biggest importer of oil (~100K b/d), that’s oil that will certainly displace Venezuela. We’re also likely to see that number rise as they get their economy on track. I think this is also going to open up doors to other countries in Latin America to the U.S. too.
We’ve always been solid south of the border, but warming up to Cuba will make a lot of people happy. Well, everyone but Venezuela. The catch is if this part of something bigger. My non-stop thinking has me waking up today thinking that maybe this is a step towards a bromance with the Venz. OPEC hasn’t shown any love to the Venz and it’s possible that we support them to make a break and be free. Or at least help the Lat Am region build out their own oil group. There’s plenty here to chew on and the U.S. will come out looking good.
The other drop in the bucket that made some ripples was the ban on fracking in New York. Seems like they are trying to make a move when oil prices are low and fracking has cooled off for now. I don’t think that this is going to set any precedent, but if oil prices bounce back up and gasoline and diesel prices get as high in NY as they do in California, buh bye Governor Cuomo. Thanks for playing. Of course it’s NY and everything there is always expensive, oh and makes little sense. For what it’s worth, NY has had the highest rate of residents leaving in the past few years.
It’s not only the lack of employment, it’s the cost of living and quality of life. Now they have probably found a way to make it more expensive, nice job. There’s been nothing but a boom in the States that have allowed fracking and it’s should be part of American pride. Soon enough oil prices will go back up and NY consumers will be paying the highest oil prices in the U.S. and wearing shirts that say, “I can’t breathe."