Staying Bullish on Energy
While oil did not rise after the formal QE3 announcement by the Fed, we think its gains in the weeks leading up to it were, in large part, in expectation of such an announcement. We also believe that continued very low interest rates and an exceptionally easy monetary policy should provide both a floor and resilience to oil prices in the range of current price levels.
In the past, the price of oil has risen in the wake of quantitative-easing announcements, with a flocking to hard commodities as more reliable stores of value. In the case of oil, the result has been demand-driven price inflation. We expect this phenomenon should continue to support oil prices and will likely give oil prices an upside bias....488 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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