Published: Monday, 31 Jan 2011 | 6:30 PM ET:
Commodities ended the first month of the year up more than 2 percent with oil front and center after unrest in Egypt sent prices soaring.
London’s Brent crude settled above $101 with U.S. crude [CLC1 91.13 -1.06 (-1.15%) ], the benchmark for world oil prices, racing to catch up.
“This was exactly the type of black swan event nobody was expecting this year — a political revolution in the Middle East — and it’s turned out to be a boon for oil,” says Adam Sarhan, founder of New York-based financial advisory Sarhan Capital in a Reuters interview.Are the sharp gains in oil here to say?
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Joe Terranva thinks so. He tells the desk that historically the period “between MLK Day and President’s Day is when oil prices typically bottom. If this is the weakest part of the year, we’re probably looking at seriously higher prices.”
Strategic investor Dennis Gartman, also thinks the path of least resistance in crude is higher. “Crude could go another $20 higher,” he speculates, “(especially) if we start to see unrest spread across the Arab world.”Guy Adami is a little more skeptical. Before the black swan event, “Oil looked like it put in a double top and was about to break down,” he says. “I think the onus is on the bulls to keep the surge going. If the turmoil dies down, I think crude slides.”
”Plus crude rallied in isolation,” says Steve Cortes. ‘Unless you think the Suez will be closed I think the rally is begging to be sold.” Cortes argues that heEEM [EEM 46.92 1.11 (+2.42%) ] is flat to slightly lower over the last 3 months. “Can energy continue to march higher without demand from emerging markets. I say not.”
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