why hasn't oil sold off?

[jk]

oil was hit a little today, but has held up remarkably well compared to stocks, industrial commodities, precious metals, emerging markets, etc. is it all risk premium? [i.e. the next named tropical storm in the gulf of mexico or the next threat in the persian gulf would spike the oil price] or is oil different in some other way? theories?

[jk]

i don't understand why this question is uninteresting

we have a sell off in every industrial commodity except oil. am i missing something? i don't think the geopolitical explanation offered above is more than a partially adequate explanation, yet there hasn't been a single thought registered by the other readers of this board. anomalies are interesting and sometimes revealing. does the fact that oil held its price tell us nothing?

[EJ]

Why is oil up while other commodities are down?

Oil stocks are the only stocks I own. Here's why in two pictures.

The first is John Serrapere's of the staglationary impact of higher oil prices over the past several years...


Enlarge

If you extrapolate this for a good long while it explains why oil prices would hold up even as demand and thus the price of other commodities declines, relative to the money supply.

Both Soros and Rogers say it will take at least eight years to get stagflation under control. They don't put it that way, though. They simply say that equities will be in the toilet -- Serrapere's graph clearly shows why.

Forget about replacing oil with cheap alternatives; conservation will be the only major lever we have to pull for the next ten years or so. My belief is that lowering energy consumption via conservation will take about that long to get on the right side of the stagflation.


Full Report

[BK]

The World Competes for precious Resources..

You are being too US focused.

Bush and Clinton never mentioned the down side of the "World Market place" and the upside of expanded International trade is Americans be competiting for Oil, raw materials, water, food (luxury goods ;-) ).
The great news is the cost of creating Web sites will be going down- and all those messy manufacturing jobs (that had great pensions and great pay) will go away.
The demand from China and India (and other formerly third world countires) for natural resources will drive prices higher.

[Jim Nickerson]

oil was hit a little today, but has held up remarkably well compared to stocks, industrial commodities, precious metals, emerging markets, etc. is it all risk premium? [i.e. the next named tropical storm in the gulf of mexico or the next threat in the persian gulf would spike the oil price] or is oil different in some other way? theories?

If one looks at the relative performance of the $CRB:$WTIC using stockcharts.com, sorry I can't put in an URL, from about 4/22 unti 5/14 the CRB (which may not be an adequate surrogate for "industrial commodities") clearly outperformed crude oil. Perhaps the CRB was more "bubbly" than crude. Since a lot of things, everything, have corrected, perhaps oil's smaller correction is due to it having been less bubbly.

[zmas28]

Less speculative excess in oil prices?

oil was hit a little today, but has held up remarkably well compared to stocks, industrial commodities, precious metals, emerging markets, etc. is it all risk premium? [i.e. the next named tropical storm in the gulf of mexico or the next threat in the persian gulf would spike the oil price] or is oil different in some other way? theories?

We've seen all asset classes taking a hit, being attributed to a reduction in risk appetite attendant on the reduction in global liquidity, leading to reduction in speculative positions. Pure speculation on my part, but does this suggest that there is/was not as much speculation built into oil as in the other assets? Meaning that the price better reflected the supply-demand fundamentals, and perhaps a geopolitical risk premium?