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Oil firmer on Fed QE speculation

Reuters -- Brent crude oil gained on Wednesday, with investors expecting that the U.S. Federal Reserve may give hints of more monetary easing, supporting demand sensitive assets.

"The big focus remains on the U.S. Federal bank meeting today," says Oliver Jakob of consultancy Petromatrix.

Brent crude rose 71 cents to $118.87 a barrel by 7:00 a.m. EDT (1100 GMT), while U.S. crude was up 56 cents at $104.11.

A third round of monetary stimulus or quantitative easing, also called QE3, should boost liquidity in markets and lift appetite for riskier assets such as oil.

"If there are hints at more quantitative easing, oil prices will shoot up again, as they are well off their highs," Michael Hewson, analyst at CMC Markets.

However, he said investors may be disappointed as he thought quantitat


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Submitted Apr 25, 2012 By: WxVette
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jrs4125
Champion Author Indiana

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Message Posted: Apr 26, 2012 6:48:36 AM

Inflation via the fed
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drpepperTX
Champion Author Texas

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Message Posted: Apr 25, 2012 12:28:58 PM

The Fed uses quantitative easing when interest rates have already been lowered to near 0% levels (as they are now) and have failed to produce the desired effect, see QE1 and QE2.

The MAJOR risk from quantitative easing is that with more money floating around, there is still a fixed amount of goods for sale and this will eventually lead to higher prices or inflation (as we are seeing now, especially with food and petroleum energy).

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gawxnative
All-Star Author Atlanta

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Message Posted: Apr 25, 2012 12:24:33 PM

HMMMM
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Van_Halen
Champion Author Atlanta

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Message Posted: Apr 25, 2012 12:23:16 PM

.
More devaluing of your Dollar to make the Arabs richer, all part of the Obama plan.

And again, Speculation has absolutely NOTHING to do with increased Oil Prices! Nobama wants you to believe that so you will not blame him or his bad policies which are the actual root cause.

It is the stranglehold on our ability to drill for oil and the devaluing of the dollar that have caused 90% of the price increase in Oil. And its being done to make the Arabs rich on our backs and is completely unnecessary.
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ccf_jeff
Champion Author St. Louis

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Message Posted: Apr 25, 2012 8:48:14 AM

You have to wonder how much of the gas price is due to all of the money printing at the Federal Reserve. Of course much of it is offset by the popping of the earlier bubbles they caused, which results in all of the defaults and a tendency toward deflation and depression.

That chart is of the monetary base... essentially the money in circulation. Much of it flowed in to prop up the stock and bond market and to refill the bank reserves held at the Federal Reserve, but when more and more of that money flows into and through the economy we'll become awash in paper money.

Hope it doesn't result in the
hyper-inflation such ramp ups in the money supply have caused in so many other countries throughout history.

The sad thing is that they'll probably have to continue printing whether they want to or not as tax revenues can't come close to paying off our monstrous national debt which is still growing by leaps and bounds.

If you add up the "official debt" and the "off-the books", "unfunded liabilities" it comes to more than $1 million per taxpayer and is growing by more than $20,000 per year. Given that the first of the baby boomers hit age 65 at the end of last year we could be in for some serious trouble. In a few years we'll have two taxpayers for every retired person, which is not good in a pay as you go Ponzi scheme like Social Security.

Crank up the money machine...

[Edited by: ccf_jeff at 4/25/2012 9:55:30 AM EST]
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BurntOrange
Champion Author Austin

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Message Posted: Apr 25, 2012 8:36:22 AM

That's the way I like my women and my oil -- firm.
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investmentdr
Champion Author Cleveland

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Message Posted: Apr 25, 2012 8:26:16 AM

gasoline is trading 7% lower over the the last 10 days.
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NukeAtComEd
All-Star Author Milwaukee

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Message Posted: Apr 25, 2012 8:06:24 AM

Good job Eugene C and SammyAdams - QE3 is setting up the US for the days of the Weimar Republic where inflation was extreme. In a span from June 1921 and January 1924, the paper Mark as compared to the gold Mark went from 1 to 1000000000000 (1 TRILLION). We will need wheelbarrows of cash for a loaf of bread!!
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drpepperTX
Champion Author Texas

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Message Posted: Apr 25, 2012 8:04:07 AM

BRENT CRUDE FUTR (USD/BBL.) 118.35 +0.19
(0.16%) 08:51 ET
GASOLINE RBOB FUT (USD/GAL.) 315.33 -0.60
(-0.19%) 08:51 ET
WTI CRUDE FUTURE (USD/BBL.) 103.73 +0.18
(0.17%) 08:51 ET
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Eugene_C
Champion Author Columbus

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Message Posted: Apr 25, 2012 8:03:20 AM

It's still dropping from week to week. By "Firmer" they mean it's just not dropping as quickly as it was.
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imcheep
Champion Author New Mexico

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Message Posted: Apr 25, 2012 7:51:18 AM

It is to bad that speculation plays such a big part in what we pay at the pump.
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Eugene_C
Champion Author Columbus

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Message Posted: Apr 25, 2012 7:42:33 AM

You can print more money to match a growing economy, as long as there is not too much inflation. They better be careful, though.

Remember: The money supply is based on the value of the economy. When you dig up more natural resources, and build more houses, etc. The economy becomes more valuable, so you can adjust the money supply to match that.

It's just when they print too much and cause runaway inflation that's the problem, and so far it hasn't been too bad.

[Edited by: Eugene_C at 4/25/2012 8:44:09 AM EST]
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SammyAdams
Champion Author Tallahassee

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Message Posted: Apr 25, 2012 7:35:33 AM

The new term for running the printing presses (formerly known as "inflation") is "Qualitative Easing". It is just as destructive of our dollar and will lead to hyper-inflation. If we don't reign in the FED, our doom is certain. We should have Congress audit the Federal Reserve. Congressman Ron Paul has introduced legislation ((H.R. 459 - Senate version is S. 202) to have the FED audited, something that has NEVER been done in a meaningful way.
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OHMS
Champion Author Orange County

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Message Posted: Apr 25, 2012 7:25:01 AM

Supply disruption concerns linked to producer Iran continue to be in focus although tensions between Tehran and the West seemed to have cooled momentarily.
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gandalfthegrey1
Champion Author Houston

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Message Posted: Apr 25, 2012 7:23:20 AM

Advice to all - 'Save your money. It might be worth something someday.' But not soon and not if the fed keeps printing. QE3 will raise prices - again!
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lcleveland
Champion Author San Antonio

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Message Posted: Apr 25, 2012 7:22:18 AM

always going up
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amoshins
Champion Author Trenton

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Message Posted: Apr 25, 2012 7:21:38 AM

Don't understand how QE could help short-term crude oil prices
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lsb1955
Champion Author Salt Lake City

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Message Posted: Apr 25, 2012 7:21:07 AM

it is to bad speculation plays such a big part in what we pay
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WalRus49
Champion Author Boston

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Message Posted: Apr 25, 2012 7:18:46 AM

More organized mayhem and pillage...........
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Evilmaddog
Champion Author British Columbia

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Message Posted: Apr 25, 2012 7:17:43 AM

the game is afoot
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dorisntx
Champion Author Fort Worth

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Message Posted: Apr 25, 2012 7:13:35 AM

and this is news - to who???
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humblepie
Champion Author Toledo

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Message Posted: Apr 25, 2012 7:06:56 AM

another trillion dollar jobs loss program ?
okay the xl and create real jobs taxpayer dollars free
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cdrrod
Champion Author Wisconsin

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Message Posted: Apr 25, 2012 7:03:25 AM

And now the roller coaster is going up again! When will this ride ever end?

[Edited by: cdrrod at 4/25/2012 8:03:31 AM EST]
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