Updates
Later, 9:10: Zacks is reporting:
The U.S. Energy Department's weekly inventory release showed that crude stockpiles went up, as imports jumped and refiners scaled down their utilization rates. The report further revealed that within the ‘refined products’ category, gasoline stocks rose, while distillate supplies were down from the week-ago level. [See linked article for analysis.]Later, 8:46: Platts implies price is moving up due to tightening oil supplies (see earlier note), but Investor's Business Daily says it is due to Mideast tension.
Later, 4:36 pm: Platts is now tweeting that it expects oil supplies dropped one million bbls in US for week ending June 14, 2013.
So, time for a new poll. Why the sudden run-up in the price of oil?
- weakening dollar
- tighter supplies
- Mideast strife
- preparing for O'BamaCare: 64%
- providing better customer service: 10% (LOL)
- both: 26%
Original Post
Talking heads said the increase in the price of oil was due to the events in the Mideast last week and this week. That may be true.
Generally speaking when there are concerns about a "big" war in the Mideast we see a fall in the stock market. That did not happen today: all eyes on the Fed.
It is perplexing: is the price of oil rising because of events in the Mideast? Interestingly enough, the headline stories in the Wall Street Journal today did not even include a Mideast story and it's hard to find a new story on the Mideast anywhere today. I thought it was related to the weakening dollar. Now, moments ago, the talking head at CNBC suggests the rise in the price of oil is partly due a tightening supply of oil later this summer. Wow, that came out of nowhere. I was unaware of any talk about a tightening supply of oil later this summer.
It will be interesting to see if anyone else picks up on this story (that we are facing a tightening oil supply later this summer), and/or if it bears fruit over the next few months.
I thought a 4th choice for this poll was .. Confidence in the Current Administration in DC.
ReplyDeleteI forgot that one. I suppose that was Freudian. "Lack of confidence in the current administration driving price of oil up" might be seen as a "given."
DeleteWith the three choices provided, weakness in the dollar is probably the closes to "confidence in current administration."