March 28, 2007

Oil Heading Higher

Wtic_one_year_emas_20070327With tensions in the Middle East back on the front page, and some semblance of risk being priced back into the capital markets over the last few weeks, crude oil prices have moved decisively off their mid-January lows. This chart shows contract prices for West Texas Intermediate Crude over the last year.

This is exactly the sort of market episode when investors benefit from strategic exposure to commodities. Even if only modest, that exposure provides excellent portfolio diversifcation benefits, especially in an era when several other major asset class seems to be increasingly correlated with one another. (More on that phenomenon in a later post.)

Chart courtesy StocksCharts.com

Mar 28, 2007 7:43:03 AM | Markets

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