ELAM: Crude hits 10 month high

Don’t be surprised if crude hits $90. While interest rates have been rising, they may fall back now raising bond prices.

This space 9.8.23

Team Biden’s war on fossil fuel has raised gasoline prices 60 cents this year. 87 Octane is now around $3.50, welcome to Bidenomics. Our bullish prediction when oil was $70 has been accurate. West Texas has topped $90 this week. Crude oil is now quite extended. A final spike high next week is possible but most of the rally is now done.

The production cuts by Saudi and Russia also contributed to higher prices. And the U.S. economy is still holding up at this point resulting in fuel demand. Diesel prices have risen 49 cents at the pump since July. This is raising the prices of everything which is shipped by rail or truck.

Airlines are also warning of higher fuel costs. The Global Jet ETF is down 19% since July.

A recent trip by a prominent Democrat to bolster support for Electric Vehicles was a bust. A lack of charging stations forced her staffers to sprint ahead in their gasoline powered cars to stand guard over a charging station. Another frustrated EV driver being denied access himself, called the police in protest.

The UAW is asking for a four year 36% raise, decreased work week to 32 hours, and various other benefits. The pan is to partially strike all three U.S. automakers, a change from just picking one in the past. Biden is the most pro-union President ever, so this is hardly a surprise. It is also a result of all the inflation of the last two years.

Our second prediction also appears correct. Long dated bond prices spiked lower and then reversed Wednesday. If you are bemoaning 7% interest rates, wait till next June when they might decline back to 5.5-6%.

The NYSE advance decline line has returned to neutral. This suggests stronger stock prices ahead even as we enter the seasonally weak October-November period.

Social mood continues strong. Investing has turned to sheer gambling with the introduction of next day options. Nearly half the total option volume traded is in 24-hour calls and puts. That is the sign of a true mania. A sweater worn by Princess Diana just fetched $1.1 million at Sotheby’s.