The following articles are compiled by:

Rick Allinson

Rick@WatchmenWatching.com

 

 

OIL FUTURES: Crude Futures Climb As $100 Beckons
Source: Biznes
 

01 November 2007 – Crude oil futures continued to build on Wednesday's gains in early London trade Thursday, with concerns over U.S. oil stocks and a weak dollar helping push ICE Brent crude futures above record highs set earlier in Asian trade.

The ICE December Brent contract hit a record high of $91.71 a barrel, and followed Nymex light, sweet crude recording a new high of $96.24 a barrel in Asian trade, as market expectations of further gains to come encouraged increased buying of crude futures, with the $100 a barrel mark proving an increasingly likely possibility.

"The intra-day range was above $6 yesterday, so when you're in such an environment you cannot exclude $100 tomorrow or even today," said Olivier Jakob of Petromatrix.

"I think the market is very, very stressed and we are outside of normal trading conditions. We also have a large layer of call options on the Nymex December $100 strike - it would be difficult for a seller to step in in front of $100 a barrel."  

 

 

Dollar May Extend Decline as Fed Rate Cut Spurs Risky Bets
Source: Bloomberg  

01 November 2007 – The dollar and the yen may extend declines against the euro on speculation the Federal Reserve's second interest-rate cut in two months will keep the global economy from stalling, spurring risky bets.

The dollar sank to an all-time against the euro and Canadian dollar yesterday after the Fed lowered its target rate for overnight loans between banks by a quarter-percentage point to 4.5 percent. Stocks, oil and gold rallied, suggesting an increase in demand for riskier assets.

``The Fed's rate cut gave a boost to risk appetite,'' said Paresh Upadhyaya, who helps manage $29 billion in currency assets at Putnam Investments in Boston. ``The perception is that the global economy will hold up well and people are buying higher- yielding currencies.''

The dollar traded at $1.4487 per euro and 115.40 yen at 6:01 a.m. in New York. The U.S. currency touched $1.4504 yesterday, the weakest since the European currency's debut in January 1999. The yen traded at 167.19 per euro after dropping 1.1 percent yesterday.

The dollar fell against all 16 most-actively traded currencies except the yen last month, losing 1.5 percent against the euro. The U.S. currency gained 0.6 percent versus the yen in October.

The U.S. Dollar Index traded on ICE Futures U.S. in New York declined to 76.465 yesterday, the lowest since the index began in 1973. The index is headed for its fifth drop in six years. 
 

Gold passes 800 dollars an ounce
Source: AFP
 

01 November 2007 – The price of gold passed 800 dollars an ounce here on Wednesday for the first time since 1980 after the US Federal Reserve lowered its key short-term interest rate, the New York Mercantile Exchange said.

Gold futures for December touched 800.80 dollars on the exchange (NYMEX) after the Fed made the cut amid a persistent housing slump and fears of inflation spurred by record high crude oil prices.

The Fed, in a widely expected decision, cut its short-term federal funds interest rate by a quarter of a percentage point to 4.50 percent.

Gold prices have jumped by about a third in value over the past year. The metal benefits from a weak US dollar as it makes commodities that are priced in dollars cheaper for buyers using stronger currencies.

Higher oil prices spark inflationary concerns, while gold is regarded as a haven in troubled times.

Its all-time record high price stands at exactly 850 dollars an ounce, reached on January 21, 1980.

Comments: Update; Oil and Gold are at record levels as the U.S. dollar continues to decline. It might not be all that bad at this point but as I have mentioned before, what would happen in the event of war with Iran? The world’s oil stocks are at record lows because of supply and demand and we know that one third of the world’s oil passes through the straights of Hormuz. What would happen if this transit was disrupted or even comes to a halt? The Straits of Hormuz constitute the world's most important oil chokepoint and the future of the world's energy is in this region and Iran has threatened to use this oil weapon in the event of an attack. Without a proper supply of oil, the world would be on its knees.

Yes, “gold is regarded as a haven in troubled times” and if this is any indication, we are in troubles times or heading for it. Gold has almost doubled in price from two and half years ago and at $800 an oz that is troubling indeed. Gold is expected to climb even higher and many analysts are saying over $1000.00 an Oz is expected. Gold is international money and as the U.S. $ tanks people are rushing towards the safe haven in these troubled times.

The Bernanke Fed has cut the interest rate again hoping that this will rescue the free falling dollar. If the dollar pegs become unglued against other currencies especially in the Persian Gulf, like Saudi Arabia and Kuwait, the dollar could collapse under its own weight. If the dollar crashes…the troubled times will get more troubling. Keep an eye on the Oil Chart, U.S. Dollar Chart and Gold Chart.

 

 

Da 12:1 ¶ And at that time shall Michael stand up, the great prince which standeth for the children of thy people: and there shall be a time of trouble, such as never was since there was a nation even to that same time: and at that time thy people shall be delivered, every one that shall be found written in the book.

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Keep watching (Matt 24:42)!

 

Until next time,

Shalom!

 

 

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