The Grant Factor

The following could be a decisive factor in the election: I'm not talking about 527 donations, ad buys or even the good old pay-off-homeless-people-to-vote. The price of crude oil just rose to just over one Grant: $50.17 a barrel. If the price of oil is sustained at these record levels (and some experts believe it will get worse and not better, see the linked article for an expert who says, "I think you're going to see $60 before you see $40,'), it will soon start hitting the American consumer at the pump. And once it hits the consumer at the pump, it could be a turning point in the election. Take a look at this chart, one we've discussed before, MacDuff. Though correlation does not imply causation, this piece of analysis does stand the test of logic. The debate talking points for Kerry are obvious. But here's a little nugget buried at the bottom of a Bloomberg article on the reason for the hike in crude oil futures:

"I think geopolitical risks are to blame for the current rally,'' said Carl Larry, an associate director of energy futures at Barclays Capital Inc. in New York. ``We will also continue to see Nigerian unrest. The shooting of the French ex-pat, more than likely by al-Qaeda, over the weekend is putting fears into the market.''

Al-Qaeda just won't go away, will it?