Comments on: Are Oil Prices and ETFs On a Slippery Slope? http://www.etftrends.com/2008/03/are-oil-prices.html Keeping a grip on exchange traded funds (ETFs) Sat, 21 Nov 2009 23:28:06 -0800 http://wordpress.org/?v=2.8.6 hourly 1 By: Thomas Cavey http://www.etftrends.com/2008/03/are-oil-prices.html/comment-page-1/#comment-804 Thomas Cavey Fri, 21 Mar 2008 02:53:52 +0000 http://etftrends.com.s14057.gridserver.com/2008/03/are-oil-prices-and-etfs-on-a-slippery-slope.html#comment-804 The economic value of oil ( pure supply & demand) is probably about $75 - $80 per barrel. For a long time there has been a terrorist premium of about $10 - $15 per barrel built into the price. This has been, and is, to cover contingencies such as violence in Nigeria, loony actions in Venezuella, etc. I believe everything above the price of $95 per barrel reflects investors using oil as a quasi hedge against the weakening dollar. As the dollar shows some strength it will probably be reflected in an immediate drop in the oil price. Tom The economic value of oil ( pure supply & demand) is probably about $75 – $80 per barrel. For a long time there has been a terrorist premium of about $10 – $15 per barrel built into the price. This has been, and is, to cover contingencies such as violence in Nigeria, loony actions in Venezuella, etc. I believe everything above the price of $95 per barrel reflects investors using oil as a quasi hedge against the weakening dollar. As the dollar shows some strength it will probably be reflected in an immediate drop in the oil price.

Tom

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