Crude oil hits $90/barrel...$100 not far off?

[Jeff_a_Caldwell]

Don't look now, but crude oil's getting close to the triple digits. Today saw February crude close above $90 for the first time since mid-2008, according to this report from our newswire here today. 

"The U.S. has hemorrhaged 19.3 million barrels of oil since late November, with inventories dropping at their fastest pace since May 2008, when oil prices were well into record territory above $100 a barrel. Oil futures have rallied 13% since mid-November, gains that, while still tepid compared to surges in the stock market and other commodities, nevertheless put oil on track towards triple digits," according to the report today. "This year's average oil consumption is on track to hit a record of 87.45 million barrels a day, up 2.9%, according to the International Energy Agency. The agency forecast a further expansion in 2011, although at a slower pace, to 88.77 million barrels a day."

Sounds like $100 oil's on its way. So, are you doing anything to hedge against these higher prices? Did you see this coming? 

[k-289]

Thought the light at the end of tunnel was the light of the economy inching to life---not the freight train of triple digit oil - -- the chaos in the markets have put me on the sidelines with the ''irrational exuberance''  mindset I find very little "sanity" at this point and time---knee jerk reactions to every news bite ---if this is the new norm Texas holdem might be easier on one's pocket book ?

[Red Steele]

$120 per barrel oil.

$8.50 bushel corn

$20.00 soybeans

the surge in the price of oil, and the plunging US inventories might signal that the US economy is doing better, or maybe it is an indication of how abnormally cold it has been. Not sure if the country  can absorb the inflationary strain, though of oil at these levels, or if the price of meat will go up fast enough to prevent widespread liquidation of our breeding herds.

I have purchased diesel and LP for 2011 at high prices...afraid they will go higher, and the 2011 crop margin is really tremendous right now.

[Blacksandfarmer]

They can fool us once but this time most farmers including myself have locked in fertilizer and fuel prices.

[Artifice]

crude hit 30 in 2008,

 now 90, and someone  should hedge now ?

Maybe if someone is hedged, cover it.

Do you trade the markets or do the markets trade you.

Artifice 

[Artifice]

RED- That is it isn’t. Will the price of cattle lead enough to prevent more mass liquidation.

As per previsions posts, I really think the cattle industry got so depressed  the last 2 yrs, liquidation is more than the USDA#s say.

We have a very strong cash and futures market  in feeders and lives, a genuine secular bull underway.

Look at feeders, corn rose 90cents going back several weeks and Feeders held, that is yelling lack of supply.

Artifice

[k-289]

Art--excellent point about 30 and 90---there are some that have been eaten alive buy margin $$$---also pasture ground being plowed at record pace--if a 16 row outfit can turn around it gets broken up---seems interesting how the news rumors and a few monday morning quarterbacks can be a goulash of informative persuasion  ---big ups--big downs--makes the$$$ world go round-

[Kay/NC]

I heard on NPR last week that the prsent run-up in gasoline prices in the US had a lot to do with a Canadian refinery that is down at present...so fuel prices were expected to stabilize when it comes back online. 

[k-289]

This morning the talk is about the cold in the northeast and heating oil demand increase---what about the canceled airplane flights by the thousands--I would guess that would easily offset one another---common sense out the window of course---buy the rumor-sell the fact ?? Seems ironic about how educated we are as a society and are so easily misinformed by a news bite?  

[Jeff_a_Caldwell]

Now, I just saw a report on our newswire here that indicates the Qatar energy minister was quoted yesterday as saying that $100/barrel oil is "too high." Wonder if, especially coming from that particular source, there's merit to that? What do you think? 

I'll keep my eye on our wire and see if there's more on this report later on.