Investors bullish on the oil market are getting support from the uncertainty in Libya, according to Phil Flynn in his column in FuturesMag.com today.
Flynn, a senior energy analyst for PFGBest Research and a Fox Business Network contributor, says rebels in Libya are already making plans to restart the energy industry there. Countries like Russia, China and Brazil that failed to support the rebels may be cut out of oil deals with the rebels, he says.
Oil bulls are also getting good news from China. The HSBC preliminary purchasing managers index for China's manufacturing sector increased to a better-than-expected 49.8 in August from 49.3 in July. The news overshadowed PMI readings for the Eurozone that came in softer than expected 51.1 percent reading, Flynn says.
The weakness in the Eurozone and renewed vigor in the commodity complex is going to raise pressure on Jean Claude Trichet to lower rates as Europe and its debt crisis could impact the world, according to Flynn. This comes at a time when speculation that Fed Chairman Ben Bernanke might be getting ready to run the printing presses with a dose of QE3 and that could create another bull surge in commodities if the Europeans remain stubborn, he says.