As I wrote last week in a piece noting commodities ex-energy, we're already above 2008 peaks in most commodities; the only major group missing out on the party has been crude oil and nat gas. [
Oct 29, 2010: Prices Paid in Chicago PMI Escalate at "Unimaginable Rate and Pace"] Since nat gas is hard to transport, we are swimming in it as the U.S. economic "recovery" is not creating much of an increase in demand. Natural gas producers are happy to churn more out at any price - even in a supply glut... after all public CEO compensation is based on 'growth' in the space and that's really what our corporations are run for nowadays. [
Aug 6, 2009: Why are Natural Gas Producers Expanding Production so Aggressively?] But oil is a global commodity and to really get this party going, we need oil to start making that run back towards $150. Because if there is one thing Americans need right now, it's $4.25 gas.
Keep an eye on the $85 level (would be a new recent high) and then $87+ (to take out April highs) ... almost every commodity on earth has gone parabolic since Jackson Hole, Wyoming but oil has been out of service. If you are a fan of the Bernanke playbook (and who isn't!), "recovery" = "inflation" = "oil to the moon Alice!". I for one am openly rooting for $150 since the most regressive tax in the nation is a "good thing", but first we need $90.... let's do this Ben.
No position but rooting for Ben's success in inflating us to Mars
