The Energy Report for Tuesday
By Phil Flynn
04 August 2009 @ 09:37 am EDT
Is the recession over!? Well for a day or so in the oil patch, it sure felt like it. A global uptick in manufacturing drove oil as fears and safe haven talk was so last month. A full fledged commodity craze is back as traders shun the safety of the dollar for the possibility of more appetizing risk. A big leap in the ISM manufacturing number following strong numbers in China and Europe created a surge across the commodities complex and demolished the greenback. Risk is cool once again and the dollar is not worth the paper it is printed on. This puts the Fed back in a tough spot as it will have to find the right balance of growth versus damaging commodity price inflation. The pressures are becoming so great that it was reported that Treasury Secretary Geithner became an expletive mouth. Good news is good as long as it is not good enough to stoke commodity inflation fear and force the Fed out of its simulative game plan.