Energy hit

GS has energy on its recommended list (oil, copper, and corn) for the next 12-24 months.

But the bulk and dry carriers don't see it that way and their perspectives are well longer than GS recommendations.

"Frontline Ltd., which owns and operates one of the world's largest fleet of crude oil tankers, said Thursday it canceled contracts to construct new tankers, representing a third of the company's tanker building program and a contractual cost of $556 million (to cancel). The stock rose." WSJ today.

Energy use turns on economic growth and that maybe a few quarters, or more, away. Maybe my call for a float up to fall next year is too much too soon as well.


This may be part of a general awaking regarding market levels being ahead of the economy.

Best, Islander.

Edited by Islander, 12 November 2009 - 06:46 PM.

As much as I agree with you, it goes to say also that the inflation is the least of our concerns and there is much less concern about the energy this time around for the reflation efforts, although CL is hovering around 70s now... Edit: the recent injections went into the right places for this reason, this is positive, I think Fed will continue to do so. The problem is the banks and the credit quality of the borrowers.

Edited by arbman, 12 November 2009 - 09:58 PM.