Category:

Review October 18, 2010

After climbing from a trading range in the low to mid $70s in late September, oil prices have remained in the low $80s for the past three weeks – closing at $81.25 on Friday. Much of the daily oil price movements are tied to the dollar rather than news concerning the oil markets. Opinions are mixed as to whether a possible resumption of “quantitative easing” will or will not help the US economy recover. Some believe the $10 a barrel increase in oil’s trading range during the past month is an overreaction to the prospects for economic growth.

The fundamental question remains as to whether demand for oil from China, India, and the oil exporting nations will be so strong over the next two years that it outruns sluggish or possibly falling demand from the OECD countries and begins to drain global stockpiles. Last week there were a number of reports and developments that bear on this issue.

Posted On :
Category:

Review October 11, 2010

Prices moved higher last week, at one point trading above $84 a barrel, before closing on Friday at $82.66. Analysts attributed the move to a weaker dollar and the French oil port strike that has been going on for the past two weeks. A weak US jobs report on Friday sent prices down to the vicinity of $80 a barrel, but continued weakness in the dollar brought it back. Analysts now believe that the jobs report will force the US Federal Reserve to begin “monetary easing” once again, resulting in a still weaker dollar and higher oil prices.

Posted On :