Why We May Be on the Way to $150 Oil

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Sept. 9 (Bloomberg) -- On today's "Chart Attack," J2Z Advisory's Jay Pelosky and Bloomberg's Adam Johnson look at why we may see $150 a barrel oil. They speak on Bloomberg Television's "Street Smart." (Source: Bloomberg)

Time for "chart attack," where we have a series of charts that will make you smarter.

We are talking about $150 oil.

Our closer, jay pelosky, says it is possible.

Walk us through how we get there.

There are a couple things happening.

The world economy seemed like it is stabilizing, maybe getting a little better.

Oil demand is going to be better than people thought a couple months ago.

Second, you have some shut-ins of important -- imported light sweet crude oil.

We have this other issue that is outstanding that could lead to -- the syria issue that is outstanding that could lead to a geopolitical event.

They could be coming to the u.s. and saying we want your oil.

Let's show people the chart that has people -- has both brent oil, the global oil out of the north sea, and nymex crude.

You can see where they are trading.

They have started to converge.

That is not good.

It suggests there is tightness, particularly in the light sweet part of the marketplace.

In the u.k., david cameron lost the parliamentary vote.

President obama is uncertain whether he will get house approval for putting the military into action over syria.

There is a question of who is minding the store.

This is impacting not only oil but gold.

Markets are jittery.

There is a sense that there is not as much supply and the world economy is starting to pick up in 2014. the next chart, you see the forward curve is for a downward sloping, declining oil prices.

That could turn out to be wrong.

Everyone tries to get on the other side of it and that pops you from $1100 to $140 or $150. out into the future, we see a lower price.

There is some sense of relief.

If there is not maximum pressure right now, when would we get it?

With syrian resolution, it could be a sense of further shot into the middle east outside of syria.

You could have a situation where people run into this position because everyone is positioned going other way.

The economy is not supposed to be that robust.

That is where the opportunity flips.

Oil goes up to $150. what else happens to the other commodities, like gold?

The 10-year?

The chart behind us shows there could be lots of moves.

What is interesting is no one is really set up this way.

We saw the forward curve in oil for lower prices.

Nobody is set up for the fear

This text has been automatically generated. It may not be 100% accurate.


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