‘Sun Worldwide’ – Worldwide Energy- (Oil Joins Stocks’ Party)…

Oct. 18, 2009 - PRLog -- Sources close to analysts at “Sun Worldwide” say that continuing weakness in the value of the US dollar is distorting the price of stocks and commodities including oil.

Although the Asian-based investment boutique is bullish on the long-term prospects for the oil price, analysts there feel that the dollar’s decline is fuelling a surge in crude prices that appears incongruous relative to the fragility of the global economic recovery.

One of the “Sun Worldwide” sources said that investors are looking for ways to hedge against the stealth devaluation of the dollar and are “piling into” equities, precious metals and crude.

Oil traded over $78 a barrel, its highest level in 2009, after larger-than-expected drawdown of gasoline supplies in the US hinted that economic activity may be translating to increased demand in the world’s largest economy.

“Sun Worldwide” believes that the effect of the rising price of oil may prove to be a difficult matter for the US authorities to accommodate since they will be reluctant to raise interest rates to combat the resultant inflationary pressures whilst the economy is in the midst of a very weak recovery and while jobs continue to be shed.

Nevertheless, “Sun Worldwide” analysts say the firm maintains its assertion that selected oil exploration, services and producer stocks remain an excellent play on the long-term prospects for the price of oil.