Crude Sharply Up, EIA Reports Lower Weekly Crude Supplies
Jul 31st, 2008 | By Doug Casey | Category: Financial News, Oil Investment & Alternative EnergyIn energy news Wednesday, oil surged upwards rebounding from their losses the previous day. Crude for September delivery rose by $4.58 to finish at $126.77 a barrel, while September reformulated gasoline rose to $3.1399 a gallon, up 12.7 cents.
The big reason for the strong rally came in the form of the weekly report from the Energy Information Administration, which said that crude supplies dropped by 100,000 barrels to 292.5 million barrels during the week that ended on July 25. This was the first supply drop in five weeks. While the fall in supply was smaller than expected by many economists, this was enough to lend some support to oil prices that have taken a beating over the past several weeks.
Rising oil prices were also aided by news from Royal Dutch Shell, Tuesday, which reported that it probably will not be able to meet all of its export obligations in Nigeria after attacks by local militants damaged two pipelines.
Add in talk from Democratic Presidential Candidate Barack Obama that Israel might attack Iran should sanctions fail and you have the recipe for a banner day for oil.
However, it is not likely that oil will continue its upward swing. According to Chris Lafkis of Moody’s Economy.com, “if U.S. consumers prove more resilient, and U.S. petroleum demand does not decline by as much as forecast, oil prices could steady or rise.”
He warned however that this is unlikely to occur. “We expect a cooling global economy to require less crude oil, and for prices to continue to fall through year’s end and beyond,” Lafkis concluded.
Source: Crude Sharply Up, EIA Reports Lower Weekly Crude Supplies
Advertisement
Ready to diversify globally? At EverBank©, you can choose from more than 20 individual currencies, including some like the Czech koruna and the Brazilian real that are just emerging.
You understand the value of diversifying beyond the U.S. dollar. And at EverBank, you'll find a range of currencies and accounts that makes diversifying in foreign currency easy and convenient.
Apply today, get expert insights and more. Visit EverBank.com or call 800.926.4922.
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.