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Phil Streible of RJO Futures explains how tapping into strategic oil reserves will impact the markets.
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Thank you Brian thank.
You.
Let's take a look at the price of oil all new report suggested that the US might tap its strategic reserves to slow the rising price of oil.
It was down -- very early in the morning now back up about a nickel a barrel.
But the international energy agency's executive director just say.
-- she is not been in contact with the White House over any emergency oil -- -- able as a senior commodities broker -- RJ of -- joining us now from the Chicago Mercantile Exchange.
You think that this is in the cards based on well your gut.
Well I think that definitely they have discussed but I mean it discuss it at the last G-8 meeting and they also discussed in that Camp David.
It would put -- -- play here really if you saw some kind of supply issue whether it's something when I ran.
Or elsewhere I think really also that the -- has to contend with.
Is whether or not they implement a quantitative easing plan if you do see an extension to that you should see crude oil prices break through the 200 day moving average 968 to move on up to a hundred dollars and I think that would be very detrimental.
To Obama resolve reelection campaign and I think that perhaps that and they may use that to try and bring prices back down but what.
Really.
We've seen this happen before and very often within the case.
-- of Libya it was related to -- actual supply disruption but what is there anything on the horizon that could significantly bring down the price of oil at this point keep it there.
Well.
Do if you look at the supply demand fundamentals right now crude oil is not only over price it's probably about 10% overpriced.
I think -- really we should come back down to the hundred day right around ninety to nineteen I think what's gonna happen is -- will push our way up to the 200 day.
I think those headlines -- from across the board I think traders will reassess some of the you know supply demand fundamentals some of those IEA releases and I think that's when prices start to come back down.
In terms of the dead man here in the United States we are on track and -- talk about this later with Tom close up.
On track for a record year -- terms of gasoline prices.
At what point do you see a significant demand destruction because of that.
Well -- time again you know well over four dollars it's gonna start hidden headlines -- them right I mean we saw down in the land off.
Last week they were doing some kind of -- promotion with gasoline.
May get some exceptions in -- some of the prices and you saw -- on the street.
Saw I mean people are definitely.
You know adherents -- -- gas prices because it directly impacts the wallet I think any kind of significant move higher -- well over four dollars you're gonna see.
You don't seriously destruction.
Still good to speak with you have a great weekend -- stable and -- until.
