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Is An Oil Super Spike On The Horizon?

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February 23, 2011 – Comments (2)

This morning the United States Gasoline Fund(NYSE:UGA) is trading higher by 0.93 cents to $45.87 a share. This is a new 52 week high for the UGA which continues to trade higher with oil. When gasoline prices increase at the pump it is a direct tax on the U.S. consumer. 

The United States Oil Fund(NYSE:USO) is trading higher this morning by 0.73 cents to $39.22 a share. The move higher in crude comes as the oil producing nations such as Libya are on the verge of a revolution. Saudi Arabia has told the United States that it can produce the lost oil from Libya's disruption. Many traders and investors are now wondering when the people may revolt against the Saudi Arabian ruler-ship. Should Saudi Arabia come under civil unrest oil could see a super spike. Everyone should still remember the super spike in oil in July 2008 and its effect on the economy.



Nicholas Santiago
InTheMoneyStocks

2 Comments – Post Your Own

#1) On February 23, 2011 at 10:54 AM, ETFsRule (99.93) wrote:

There could be a spike, but I don't think it will last very long. Look at how quickly the situation in Egypt was resolved. Ok, maybe it's not completely resolved, but you know what I mean.

In Libya I think the current regime will probably be ousted very soon (a couple weeks maybe). Once the fighting stops, BP will be back in Libya before you can blink an eye.

The situation that would worry me the most, would be if a war broke out between two different countries (people are looking at the possibility of a conflict brewing between Saudi Arabia and Iran). That would be a nightmare. But unless that happens, I don't think there will be a very prolonged disruption of the oil supply.

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#2) On February 23, 2011 at 11:00 AM, saunafool (98.77) wrote:

Only if Saudi Arabia descends into chaos. Libya is a little pee pee trickle comparatively.

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