LONDON (Reuters) - Oil leapt to a new record high near $142 a barrel on Friday, extending gains after surging nearly 4 percent in the previous session, as tumbling global stock markets triggered a wider commodities rally.
[From Oil jumps to new record near $142 as equities wilt - Yahoo! News]
"Commodities rally." Not a word about low production or high consumption or even the wimpy dollar.
When did oil break $100 - late March or early April? About three months ago? Am I supposed to think production fell 40% in three months? Consumption went up? Some combination of the two, even considering the dollar's sorry state? Forty percent in three months? No way.
This isn't about offshore drilling. Or about people driving SUV's. This is about people making money.
PS: Krugman begs to differ. Or so it seems.
"It has a lot to do with asset allocations. The equity markets are under serious pressure, breaking support levels. When equities are going nowhere, the money is parked into commodities," said Olivier Jakob at Petromatrix.
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