Oil Comes Storming Back
Jun 12th, 2008 | By Doug Casey | Category: Oil Investment & Alternative EnergyIn the energy market Wednesday, crude for July delivery skied higher, to close at $136.38/barrel, up $5.07. July reformulated gasoline shot up 15 cents, to $3.47/gallon.
Oil surged after a surprising weekly inventory report on crude stocks from the Energy Department that showed a decline of 4.6 million barrels for the week ended June 6. Supplies are now down 23.6 million barrels in just four weeks.
Energy also reported that gasoline stocks were up by 1 million barrels, and distillates were up by 2.3 million barrels. Refinery utilization stood at 88.6% of capacity, compared with 89.7% a week earlier.
Nevertheless, refiners’ utilization “has significantly improved over the last month as the gasoline crack spread has expanded mightily,” wrote Chris Lafakis, of Moody’s Economy.com. “Crack spread expansion has provided refineries with all the incentive they need to churn out extra gasoline.”
Crack spread is the margin that a refinery can earn by refining a barrel of oil into finished products such as gasoline.
There’s no way he’s going to “call for a top in this market,” wrote John Person, president of National Futures Advisory Service. “Not by a long shot … Unless we close back under the $118 level, I would continue to be a buyer in this market on substantial breaks like we did last week near the $122-to-$125 level.”
Source: Oil Comes Storming Back
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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.