Financials, Oil And Commodities, Oh My.

The stock market today will see more of the same volatility as it has for the last week. Lehman Brothers (NYSE:LEH) reported their expected horrible quarter and as a result it has cause the markets to get scared and run. With the price of oil dropping, one would think that the markets would be off and running to great gains, but that’s not the case. Commodities are also dropping as quick as lead would if dropped off the Empire State Building. China’s demand for commodities have basically stopped. The country was buying materials like no one else has done in the last year and was expected to continue even after the Olympics, but for some reason that’s not happening. I did read some reports a couple of months ago saying that China was stock-piling many commodities like steel and copper.

Crude inventories fell 5.8 million barrels and OPEC has decided to trim it’s output to help increase the falling prices of oil. OPEC has decided to decrease the overall output by more than 500,000 barrels a day.

This is the reason why we need to get off the our dependency of foreign oil as well as the use of oil itself. If they don’t like the price that they get for a barrel of oil, they just go ahead and produce less to cause the price to go up. A clear and present danger on our security and our economy. President G.W. Bush has announced that he disagrees with their decision (oh, like they really care), but what is that going to do? We are in a situation where we need this product and if we don’t pay the price, someone else will and then what are we suppose to do.

In a related report that was released today, the International Energy Agency has lowered their forecasts for global oil demand for the rest of this year as well as 2009 because of the impact of the weaker economic conditions and the high prices during the summer.

Share and Enjoy: