Yesterday’s report on oil and gas inventories corroborated the API numbers from the prior day. We are continuing to see a build over the past few months. This is USUALLY a sign that oil prices will begin to move lower as supply is outstripping demand. Unless of course it is 2008 or 2009. During this time of altered reality, supply and demand do not matter. The price of oil is a inexplicably linked to the decline/advance of the U.S. dollar’s.
Now that there are several countries devaluing or debasing their currencies (North Korea, Vietnam, Japan, China) among others that will surely follow. Playing the game of lowering the value of a currency to make exports more competitively priced is not going away anytime soon. So, we will have to suffer with higher oil prices, even if inventories continue to grow as long as the U.S. continues its quantitative easing policy.
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