It seems that George Soros is trying to profit from the oil/gold ratio which has been skewed toward oil for quite some time. Mr. Soros must feel it’s time for the ratio to come back to the mean (or beyond).

I had to make the difficult decision to buy some home heating/cooking/water heating propane for delivery next week. The price isn’t as high as it should be, my dealer bought many contracts at lower prices for the “summer fill” program. But for ordinary delivery, propane would be higher considering oil at even $130 per barrel.

Note, propane seems to track either oil (which it’s not derived from) or natural gas, which is a cousin, whichever is higher. Natural gas did NOT drop in the shoulder season of spring this year like it normally does, so there was no incentive to let propane fall.

The dealer I buy from indicated that while no one seems to be calling for lower prices, the price of crude would have to drop to about $100 per barrel and stay there a while for propane to come down much.

I pointed out to him that last year EVERYONE was calling for lower prices and look what happened instead.

I hope Mr. Soros is right on both of his bets. We need lower oil, although it may not stay there for the longer term; and I feel higher gold is baked in the cake. Once the powers that be are no longer to overcome market forces, gold and silver should simulate a moon shot; at least in US Dollar terms.

Should be interesting to watch. At least if oil prices do go down, perhaps some of the refinery stocks such as Valero can recover the trauma they have suffered.

Even with $100 oil, there is a lot of money to be made in the oil patch. Are you glad you didn’t buy Exxon Mobil (see Don’t Buy Exxon Mobil) when certain others were recommending it?

Peak oil is a long term phenomenon, if you want to be in for the short term or the long haul, I recommend getting some good analysis and recommendations. Try Casey Energy Speculator.