The best thing about the commodity crash relapse taking place so quickly after the last swoon – recall tha we have had two oil bear markets within 8 months – is that all those hollow chatterboxes and econo-tourists who swore that tumbling oil is “unambiguously good” and “great for the economy” (first and foremost Larry Kudlow and then proceeding with every single sellside strategist and economissed), have been laughed out of even CNBC’s studio, and are nowhere to be found this time around because not only did all those promises of a surge in consumer spending never materialize (for reasons, or rather one reason which we explained extensively before), but the observent public still remembers all too well how countless ‘experts’ confusing cause (a gobal slowdown in the economy) with effect (crashing commodities).
Therefore, we were delighted when someone who actually understands the energy market for a change, The Schork Report’s Stephen Schork, appeared on BBG’s Pimm Fox yesterday to explain not only what the immediate future holds for both oil and gasoline prices, but why, when one actually gets cause and effect right, “this drop in oil prices, this drop industrial metal prices, this is not good. It’s a canary in the coal mine that something is not right in the global economy, and that is a concern for us all.”
The full interview is below, here are the key spot-on highlights, first about the futures of commodity prices :
… from a demand perspective on the seasonal front, it’s August 7. We only have four more weeks left of summer driving, then the peak gasoline season is over. Then we head into the fall where the fall turnaround; that is the refinery maintenance season begins. So refineries will scale back in their crude oil purchases. So right now we are