Wednesday, February 16, 2011

Crude Oil

My investment strategy recommendations continue to overweight the beneficiaries of the global boom. However, if the price of oil spikes to $150 a barrel over the next few months as a result of turmoil in the Middle East, all bets are off. Brent closed at $104.21 on Wednesday, the highest since September 5, 2008. It is up from a 2010 low of $69.19.

I still expect that OPEC nations will pump more oil to avert a spike in oil prices. It is in their interest to do what they can to reduce global instability caused by higher fuel prices. The only problem is that there is mounting political instability in OPEC oil producers such as Algeria, Iraq, Iran, Libya, and Bahrain.

No comments: