Crude Still on the Rise
Jul 20th, 2009 | By Doug Casey | Category: Oil Investment & Alternative EnergyIn the energy market, crude oil for August delivery climbed $1.51 from Thursday to close at $63.56/barrel. August reformulated gasoline rose more than five-and-a-half cents to finish at $1.7699/gallon.
Crude got a boost from the housing data mentioned above, as the news raised hopes for an economic recovery.
Also pushing oil higher (according to MarketWatch), some traders who had been shorting, or selling without owning, the front-month contract have to buy it back to cover their positions before the contract expires Tuesday.
“Trading is like wind, and any economic headline that comes along can change the direction,” said Phil Flynn, vice president at futures trading and research firm PFGBest Research. “It seems traders want to cover shorts ahead of the weekend.”
The 6.1% gain oil posted this week came after a 10.3% fall last week. For the month, oil is still down 9.1%.
Meanwhile, China, the second-biggest energy consumer after the U.S., processed a record volume of crude oil in June as faster economic growth boosted fuel demand and refining profits encouraged production.
Oil processing rose for a fifth month to 31.9 million metric tons, or about 7.76 million barrels a day, China Mainland Marketing Research Co., which compiles data for the government, said in a statement yesterday.
“Developing countries are going to grow and consume more energy,” said Paul Crovo, a Philadelphia-based oil analyst with PNC Capital Advisors. “This may be enough to offset tepid growth in the developed countries, like the U.S., and provide for reasonable growth in demand.”
Source: Crude Still on the Rise
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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.