Crude Backs off New Record
Posted on: Jul 12th, 2008 | By Doug Casey | Filed under Oil Investment & Alternative Energy
In the energy market Friday, crude for August delivery backed off from a record high hit in early electronic trading, but still moved substantially higher for the second straight day, closing at $145.08, up $3.43. August reformulated gasoline added 5.23 cents, to $3.56/gallon.
What a wild and woolly week it’s been, with an unchanged price on Wednesday bracketed by a $9.25/barrel loss on Monday and Tuesday, and a $9.03 gain Thursday and Friday.
The difference seems to have been in foreign affairs. “Most of the current upward pressure is about Iran,” said James Williams, of WTRG Economics. “Until the rhetoric on both sides [Iran and Israel] is toned down, this will be a major driver in oil price movements.”
Indeed, demand doesn’t seem to be driving anything. The Energy Information Administration projected that U.S. petroleum consumption will shrink by 400,000 barrels a day in 2008, up nearly 40% from the June estimate.
Michael Fitzpatrick, an analyst at MF Global (NYSE:MF), added that “with the weekend looming no one wants much of an exposure, particularly with potential MEND activity tomorrow.” Nigerian militants who head the Movement for the Emancipation of the Niger Delta (MEND), have said they will end their two-week cease-fire today.
Source: Crude Backs off New Record
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