Crude Pushes Higher
Jun 30th, 2009 | By Doug Casey | Category: Oil Investment & Alternative EnergyIn the energy market on Monday, crude for August delivery shot higher, closing at $71.49/barrel, up $2.33. July reformulated gasoline gained 6.2 cents, to $1.936/gallon.
Crude pushed upward after an attack on an oil platform in Nigeria rekindled supply worries, and provided “the big underpinning for oil,” said Kevin Kerr, president of Kerr Trading International.
The Movement for the Emancipation of the Niger Delta (MEND) said that it had struck at the Shell Forcados offshore platform in Delta state. That was a disappointment, after militants said late last week that they are prepared to lay down their weapons while they consider an amnesty offer from the central government.
Kerr added that “if the dollar fails to hold support [at current levels], it’s likely crude will rally further.”
But Edward Meir, of MF Global, wrote that, “Outside of a sharply weaker dollar, we do not see any imminent factors that could see crude-oil prices retesting their June highs anytime soon.”
Meir added that “energy fundamentals still look rather weak in terms of oil demand, this despite a slight improvement in the global macro picture.”
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Doug Casey is a contrarian investor, sought-after public speaker and author of several books. His work "Crisis Investing" held the position of # 1 bestseller on the New York Times list for 26 consecutive weeks. Doug's unusual views on the economy - and just about everything else - have gained a huge following in the investment community, and it certainly helps that his stock recommendations of undervalued junior exploration companies have made his subscribers millions. Now in its 27th year, Doug's monthly newsletter, the International Speculator, is one of the most established and esteemed publications on gold, silver and other natural resource investments. Together with the Casey Energy Speculator, it covers a broad range of carefully selected stocks with the very real potential of double- and triple-digit returns within 12 to 24 months.
I was under the impression that the price of crude was effectively set by OPEC, since they control virtually all the supply. I thought the dollar was vulnerable to changes in oil supply, not the other way around.