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"Renewable fuels and clean energy, a sector beaten down hard since last fall, are now primed for a major comeback," says Eric Roseman, editor of The Commodity Trend Alert. Here's his ETF play on the sector.

"With every passing day the price of crude oil rises, the secular trend to alternative energy becomes even more powerful. Consumers, companies and governments are now sick and tired of soaring energy prices.

"The long-term solution is to obviously reduce our dependence on oil and increase our consumption of renewable fuels like wind, solar, and nuclear energy.

"The bull market in alternative energy began in 2005 when a host of companies in this thriving sector went public, supported by government subsidies, especially in Germany and Spain. Interestingly, Germany and Spain have just reduced solar energy subsidies this spring.

"In my view, those subsidy cuts don't matter at this stage. When companies in the solar sector are making money, why should governments continue subsidizing them?

Another day, another oil record.

Oil easily pushed past $145 Thursday morning after traders calculated that the already weak dollar has further to fall after the European Central Bank increased a key interest rate by a quarter point to 4.25%.

Oil rose as much as $2.28 to $145.85 per barrel -- an all-time high -- before easing back slightly to trade at $144.40 at mid-day.

Oil tends to rise when the dollar falls as investors/traders seek to preserve purchasing power of the decreased value of dollar-denominated commodities by bidding their price up. However, it's important to note that the dollar/oil correlation is not perfect: there have been instances in which the dollar fell and oil fell.

These days, European Central Bank President Jean-Claude Trichet isn't too popular in currency market circles, if one trader is any indication.

Trichet, a legendary inflation hawk, campaigned for and secured a quarter-point interest rate increase Thursday, to 4.25%, in the ECB's key, short-term interest rate, the refinance rate. Many economists thought Trichet's action was premature, despite Europe's 3.7% annualized inflation rate, and that it could spell further economic slowing Europe. Unbowed, Trichet plowed ahead.

With the above as a backdrop, many currency traders, Andrew Resnick among them, plowed ahead with euro-long trades on the calculation that a higher interest rate for the euro will cause the euro to rise. Resnick went long with the euro in the euro-dollar currency pairing.

But then what did Trichet do? He stated at the regular post-ECB rate decision press conference that he has "no bias" and that "we have no pre-commitment" to raise rates further - - signaling that one interest rate increase may be enough, Bloomberg News reported.

The result? The euro plunged versus the dollar after his comments: it fell 1.2 cents - - a large price move in the currency market - - to $1.5758 Thursday morning.

And with it plunged Resnick's profits for the day. All his trades were stopped-out for losses.

'Trichet is making many friends among traders'

"Trichet," Resnick said, "isn't making many friends among traders, and probably not among business executives and economists as well." Resnick followed his evaluation of Trichet's social standing with several candid and frank, descriptive, colorful comments about the ECB president that can't be published here. Suffice it to say that Resnick is not happy with Trichet's two-step.

In a move that surprised almost no one, the European Central Bank increased its key interest rate, the refinance rate, a quarter point to 4.25%. The increase brings the refinance rate to its highest level in seven years.

The currency market, which for the most part had already factored-in the ECB rate increase, did not react initially following the decision. The euro was virtually unchanged versus the dollar at $1.5882.

The other major currency pairings also held their ground. The dollar was unchanged against the pound at $1.9884 and the dollar rose slightly, up 0.10 yen to 106.25 yen, versus Japan's yen.

Economist: Trichet 'jumped the gun'

London-based economist Mark Chandler told BloggingStocks Thursday the ECB's decision was no surprise, but that doesn't decrease his disappointment with the ECB's stance.

"I afraid I'm going to really disagree with this one. I understand where [ECB President Jean-Claude] Trichet is coming from, but he's jumped the gun from my perspective. He could have waited another quarter," Chandler said. "There's a real concern now he's going to throw Europe into a recession like America, and if the dollar continues to fall against the euro, his rate increase won't lower inflation all that much. I don't like that bargain at all."

The worst news Wednesday regarding oil wasn't its record high close of $143.57 per barrel. It was the dollar.

"There may be another record Thursday, and another Monday, and so on," energy trader Jim Dietz told BloggingStocks Wednesday.

The reason? Concern that the already weak dollar will fall further, Dietz said. The European Central Bank meets Thursday to vote on interest rates, with many economists expecting the ECB to increase it refinance rate by 25 basis points to 4.25%. If it does, the dollar may fall further, Dietz said.

Traders eye ECB meeting

"And if the dollar falls, that would put even more upward pressure on oil, so all eyes will be on that ECB decision," Dietz said. The ECB will announce its decision Thursday at 7:45 a.m. EDT. Oil tends to rise when the dollar falls, as investors / traders seek to preserve purchasing power of the decreased value of dollar-denominated commodities by bidding their price up. However, it's important to note that the dollar / oil correlation is not perfect: there have been instances in which the dollar fell and oil fell. Thursday won't be one of those instances, Dietz said.

"If we see a major move down by the dollar, say one cent against the euro, that will easily send us over $145 a barrel," Dietz said. As of late Wednesday afternoon, the dollar had already fallen about nine-tenths of a cent to $1.5882 versus the euro.

Many investors / traders are aware of the increasing demand for oil stemming form emerging markets economic growth. Vibrant, dynamic economies in China and India, but also in Australia and the Middle East, have been the biggest factor in oil's four-year bull market, which has brought oil prices to a record of over $140 per barrel.

Moreover, oil sector analysts, economists and executives are counting on continual, sizable oil production increases from non-OPEC nations to help contain oil prices in the quarters and years ahead, but now it appears there may be a problem related to that assumption.

Non-OPEC, OPEC output estimates lowered

The U.S. Energy Information Administration, the U.S. Department of Energy's statistical unit, has lowered its estimate for non-OPEC production in 2010 by 1.1 million barrels per day to 51.8 million barrels per day, from last year's forecast of 52.9 million. At the same time, the EIA lowered its 2010 OPEC production forecast by 400,000 barrels to 37.4 million.

Further, the EIA now sees 2010 global oil demand at 89.2 million -- in other words a statistical balance between daily global oil supply and demand.

Economist Glen Langan told BloggingStocks the projected production reduction is not good news for consumers in either the developed or developing worlds.

U.S. gasoline consumption has declined for more than two months on a year-over-year basis, U.S. Energy Information Administration data indicates,

From a consumer standpoint, that's not only a good thing, it may be the only thing keeping already sky-high, $4 per gallon gasoline prices from moving even higher, says energy trader Jim Dietz.

"Lower demand is preventing gasoline sellers from raising prices even more. That's bad news for them, but it is helping consumers a little by keeping prices lower than what they would be, given the jump in oil prices," Dietz said.

Oil, which traded at $142.80 per barrel, up $1.83 on Wednesday at mid-day, is up about 100% in the past year. Meanwhile, the average price for a gallon of unleaded gasoline in the U.S. is about $4.09 per gallon, up about 45% during the same period, according to the EIA.

"Historically, a gallon of gasoline cost two times to three times as much as a gallon of crude oil. Now that price ratio is about 1.3-to-1," Dietz said. "If the old ratio applied, gasoline would easily be 40-60 cents higher, probably more." Dietz added that he is presently flat, or has no energy trading positions open ahead of the 4th of July weekend.

A few weeks ago, amid concerns about Midwest flooding, corn futures exploded. For a brief period, in fact, they nudged over $8 a bushel for May 2009, a four-fold jump over their 2006 prices, and were expected to go higher.

On June 30, however, a report by the Department of Agriculture put things into perspective. While the Midwest floods destroyed roughly 9% of the corn crop, this loss should be largely offset by the fact that farmers planted more corn than expected. Inspired by the rising prices of the grain and the promise of ethanol, farmers cultivated more than a million extra acres, which means that the U.S.'s corn supply should remain relatively steady.

This should be a boon to the ethanol industry, which lost no time in pointing out that the forecasted harvest should be more than sufficient to supply its needs, while leaving a sufficient quantity for food use. Of course, just because we are once again able to make corn ethanol doesn't mean we should. However, it still remains to be seen whether policymakers will ignore this scare or accept it as an indicator of the dangers that we face when we put all our eggs in one basket -- or all our ears in one bushel!

In comments made June 23 to Germany's Die Zeit but published only today, European Central President Jean-Claude Trichet warned of an "explosion" in inflation if the bank does not act decisively to counter it, Reuters reported Wednesday.

"If we are not resolute, there is a risk that inflation will explode. If we act decisively, then we can master the situation," Trichet said in the German text of comments published by weekly Die Zeit on Wednesday.

Trichet's comments appear one day before the ECB's meeting on interest rates. Many economists expect the ECB to increase its key interest rate, the refinance rate, by 25 basis points to 4.25%. (The ECB decision will be announced Thursday at 7:45 a.m. EDT.)

At issue: How to check inflation

European inflation is running at a 3.7% annualized rate, and trending up. That fact, combined with Trichet's comments published Wednesday, "all but guarantee a rate hike Thursday by the ECB," in economist David H. Wang's interpretation.

One of the major economic debates on Main Street and in Washington concerns the influence of speculators during oil's record price rise. (Oil currently trades above $140 and is up 100% during the past year, and more than 400% since 2000).

More than one Congressional committee is investigating the role of speculators, who critics say have 'distorted' or artificially boosted oil's price -- driven it higher than a level the commodity would trade at if the price were based solely on supply and demand fundamentals.

New York Times columnist Paul Krugman, while not denying speculators have contributed to oil's record rise, nevertheless offers perhaps the strongest evidence regarding how a commodity's price can rise a great deal, without the influence of speculators. His evidence: iron ore.

Oil prices rose above $142 on a lowered supply estimate and tension between Israel and Iran over Iran's nuclear program.

Oil rose $2.06 to $142.06 per barrel after the International Energy Agency predicted that spare capacity in OPEC will shrink by 2013, keeping the oil market "tight."

Oil bulls were also motivated to hit the buy button after ABC News reported that Israel may attack Iran's nuclear facilities if Iran acquires enough uranium to build a nuclear weapon, citing a Pentagon source who spoke on condition he not be identified.

The other major energy commodities also vaulted higher Tuesday at mid-day on the news. Heating oil rose 8 cents to $3.97 per gallon, unleaded gasoline increased about 5 cents to $3.54 per gallon, and natural gas added 20 cents to $13.55 per million BTUs.

If an enemy sworn to the destruction of the global economy was given free reign, it would follow the strategies of its current leaders.

One key to destroying an economy is to break its pricing mechanism. What does an effectively functioning pricing system do? It creates a market of buyers and sellers who can meet, agree on a price, conduct the transaction, and create an information trail that permits future market participants to judge what might be a fair price for their transactions.

Another key to destroying an economy is to put too low a price on risky behavior. Why is it important to price risk accurately? Because if decision-makers do not assess the risk at the time of their decision, the economy will end up paying for the under-priced risk long after those decision-makers have left office.

So how have current leaders broken the pricing mechanism and under-priced risk? Here are three ways:

If you're hearing whispers that the dollar might be creeping up in value and that this might put downward pressure on commodities, then let me tell you: Don't you believe it. Although some upward adjustment might occur for the dollar, it's my opinion that this won't, by itself, reduce commodity prices. To think so is just too limited an economic scope.

First, we can believe that the platform of oil prices is going to hold solid. I do think that the price of oil will eventually recede, but it's not going to be soon and it's not going to be much. It'll be a couple years before we see any real decline, if we ever do. That reality gives us a good launching point for some speculation. Alternative fueling for motor vehicles will keep upward pressure on oils other than petroleum. Consider commodity soybeans, soybean oil, and palm oil as possible hedges. There's also potential in propane, and to me, natural gas is still artificially under valued. You might not think there's a relationship between these commodities and petroleum. Believe me though, there is. Also, like the high volume traded commodities, other vegetable oils, such as sunflower oil and cottonseed oil, are worth looking into.

Despite being on the verge of the best first six months of a year in the past 35 years, there are some concerns we may see a reversal in commodities over the next six months. This would come as a result of higher oil, copper and other raw materials prices that could put pressure on consumer spending and lead to a growth in supply.

The negative effects have already started to become visible as gasoline demand has slipped in the U.S. due to high costs, while gold purchases in India saw a plunge of 50% year-over-year. "I've probably been positive for seven years and this is the first time I think there could be really a dramatic secular reversal, that it's not just a pullback" Michael Aronstein, president of Marketfield Asset Management in New York, stated.

The impact will not pass unobserved for airline companies, who will face a decline in the number of travelers over the Fourth of July holiday, following soaring jet-fuel expenses. Copper and gold demand are also facing weak levels after the price for copper reached $4.2605 a pound May 5, the highest ever, while the price for gold reached a record $1,033.90 an ounce March 17, and is expected to average $850 this year and $750 next year.

Things just keep looking brighter for Exxon Mobil (NYSE: XOM). After reporting the highest profits ever posted by an American company, it is able to look forward to an even more profitable 2008. With crude oil prices steadily creeping upward and renewable energy replacements a distant solution, Exxon can look forward to, once again, rewriting the record books.

As if that wasn't enough, the Supreme Court recently ruled that Exxon's punitive damages in the Valdez case were excessive and dropped them to one fifth of the original ruling. In 1994, the original judgment against Exxon in Baker v. Exxon was $287 million in actual damages and $5 billion in punitive damages. At the time, the punitive damages were equivalent to one year of profit for the oil company. After two subsequent appeals, the judge reset the damages to $4 billion, $4.5 billion, and ultimately to $2.5 billion. On Wednesday, twenty years after the original accident, the Supreme Court ruled that Exxon now owes $507 million. With interest, that would come to approximately $1 billion, but Exxon is expected to appeal the interest.