Arraya, you are kidding right? Future supply disruptions caused by demand that India and China will have in the future are being priced in today, even though they are not drawling on supply like they WILL be. If you wanted to benifit from future gains in demand, you should buy oil stocks or oil land, not oil that is gonna be used in 10 weeks.
On Wednesday, oil prices fell $1.24 a barrel after the Energy Department reported crude inventories rose more than expected last week. But that reflected a rare reaction by oil investors to supply and demand fundamentals. Oil prices have been far more affected in recent months by dollar- and interest rate-driven investment decisions, analysts say.
“[Fundamentals] have no relationship to price right now,” Flynn said. If prices were responding to supply and demand, fundamentals, they would be falling, he said. Several recent forecasters have lowered oil demand growth predictions for this year due to the slowing economy, and domestic oil inventories have been growing.
Oil prices have received some support in recent days from word of a technical glitch that temporarily disrupted the flow of a small amount of crude out of Nigeria. Eni SpA denied earlier reports that its Brass River oil terminal had been attacked by rebels. Turkey’s recent invasion of Northern Iraq in search of Kurdish rebels has also been supportive, Flynn said, but these stories are not enough in and of themselves to explain why oil continues to trade above $100.
Many analysts believe it’s just a matter of time until the fundamentals reassert themselves on the market, pushing prices down
