Like the Oil Spike Never Happened
Pricing crude oil out of the Dollar this Fourth of July...
SO THIS WEEK'S spike in the price of Brent crude oil to $73.50 was due to a "rogue trader".
His unauthorized dealing through the PVM brokerage reportedly sparked 30 times the typical trading volume and incurred a loss of $10 million.
Whatever the regulators missed this time, that spike hardly compares to last summer's run. But averaging nearly $70 per barrel in June, the price of US crude oil just matched its average monthly price of the last four years.
No, that's not much of a recovery given the monthly top of $132 per barrel hit this month and last in 2008. And it's peanuts next to the record daily close of $145 hit on Bastille Day, July 14th '08.
This Fourth of July, however, and not least if you're out driving, spare a thought for just how much more expensive crude oil and thus transport, heating, detergents and plastics are today than back before the credit bubble morphed into the financial crisis and then into today's global depression.
Also note how the spike of '08 was only slightly tempered for European drivers and households when the North Sea benchmark, Brent crude, is priced out of Dollars and into the British Pound.
Whereas, if priced in Gold - a simple enough concept amid rumors and counter-rumors of Chinese grumping over the Dollar's volatility and the search for a new world reserve basis - crude oil is now back pretty much where it was throughout the low and falling trend of the late 1980s and 1990s.
Just a thought. Happy holidays if you got any independence to mark.