- Heating and stove oils are up by 1.23 cents
- Diesel shows an added 1.4 cents, and...
- Gasoline shows an added one cent a litre increase.
So, what's up with oil? Why hasn't it gone bonkers as in other years?
Good questions, but there seems to be just one answer, and that one can be a loaded answer on my part, but it's best described in one word; trust.
Right now, and this is just my view, the investor is caught between the realities of a world market that has become "undefined". We used to know who could pay their bills and who in the world could spend. We used to know that it was a safe bet that we could take a summer vacation and still have a job when we came back from it. It is my view that this one-time reality has changed and that we simply are dealing in a world where we can't trust the economics of the world anymore, or, at least, not like we used to, and that reality is showing itself in the face of instability with oil prices.
When was the last time you heard of a recession where there were several world countries debt being talked about so openly? This world has become so small that information about debt-load has become a fixture of conversation right up there with who's going to pay the Visa bill next month.
We have countries so mired in debt; Dubai, Italy, Greece, Spain, Hungary, Portugal, Ireland and the United States just to name a few. While most of these countries have put in austerity measures, we still have to see the results of debt-load being paid down and a level of spending maintained by the same countries in question. We also have to see them maintain those payments back for loans to cover their debt-loads. Problem here is that I believe that investors can't trust their money on a concept that has yet to be carried out by the countries at question.
If that's the case, what we're witness to is a "wait and see" approach that investors have taken with today's world economy and probably why oil prices have stalled their regular, upwards summer climb.
It's probably another reason why there's a good chance we'll see another retreat in oil pricing too, at least until the markets are all something we can trust again. economies need oil, but economies need financial stability too.
I'll be back tomorrow night with the final numbers!