Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
It's Five Nights at Freddy's Again! - 12th Jan 25
Squid Game Stock Market 2025 - 5th Jan 25
Stock Market Bubble Drivers, Crypto Exit Strategy During Musk Presidency - 27th Dec 24
Gold Stocks’ Remain Exceptionally Weak Even as Stocks Rise - 27th Dec 24
Gold’s Remarkable Year - 27th Dec 24
Stock Market Rip the Face Off the Bears Rally! - 22nd Dec 24
STOP LOSSES - 22nd Dec 24
Fed Tests Gold Price Upleg - 22nd Dec 24
Stock Market Sentiment Speaks: Why Do We Rely On News - 22nd Dec 24
Never Buy an IPO - 22nd Dec 24
THEY DON'T RING THE BELL AT THE CRPTO MARKET TOP! - 20th Dec 24
CEREBUS IPO NVIDIA KILLER? - 18th Dec 24
Nvidia Stock 5X to 30X - 18th Dec 24
LRCX Stock Split - 18th Dec 24
Stock Market Expected Trend Forecast - 18th Dec 24
Silver’s Evolving Market: Bright Prospects and Lingering Challenges - 18th Dec 24
Extreme Levels of Work-for-Gold Ratio - 18th Dec 24
Tesla $460, Bitcoin $107k, S&P 6080 - The Pump Continues! - 16th Dec 24
Stock Market Risk to the Upside! S&P 7000 Forecast 2025 - 15th Dec 24
Stock Market 2025 Mid Decade Year - 15th Dec 24
Sheffield Christmas Market 2024 Is a Building Site - 15th Dec 24
Got Copper or Gold Miners? Watch Out - 15th Dec 24
Republican vs Democrat Presidents and the Stock Market - 13th Dec 24
Stock Market Up 8 Out of First 9 months - 13th Dec 24
What Does a Strong Sept Mean for the Stock Market? - 13th Dec 24
Is Trump the Most Pro-Stock Market President Ever? - 13th Dec 24
Interest Rates, Unemployment and the SPX - 13th Dec 24
Fed Balance Sheet Continues To Decline - 13th Dec 24
Trump Stocks and Crypto Mania 2025 Incoming as Bitcoin Breaks Above $100k - 8th Dec 24
Gold Price Multiple Confirmations - Are You Ready? - 8th Dec 24
Gold Price Monster Upleg Lives - 8th Dec 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Crude Oil Back at $60

Commodities / Crude Oil May 13, 2009 - 09:58 AM GMT

By: LiveCharts

Commodities

In the midst of rising global stock markets, and a falling dollar, oil prices have surged to sit near $60 per barrel, with a close Tuesday (May 12) at $59.59. The dollar has fallen to its lowest mark in nearly four months thanks to the rising global picture and continued concerns about the United State fiscal economy.


Oil continues to rise in unison with the stock market as well. The trend of correlated growth in stocks and oil has been obvious since the Dow touched down at 6,500 points earlier in the year. Several major oil companies recently posted smaller profits for the first part of 2009; though calling Exxon’s $5 billion profit disappointing seems a bit over the top. Oil has climbed with stocks in lieu of optimism about financial recovery. The assumption is that economic stabilization will increase consumer demand for energy and fuel for transportation, as well as more use of energy for business growth and travel.

Americans have started noticing the change in fuel prices again as well. Most pumps across the country have pushed back over the $2 level. However, interestingly, the message playing out in the media suggests that consumers should rejoice while they pay more. Economists are pointing out the fact that oil and gasoline prices increasing are a positive sign for the economy.

The general dollar weakness has also been seen against the Euro and Pound, which have risen to levels not seen for several months. The dollar had gain tremendously against these two currencies in particular during the period in which oil and gas prices fell.

Another reason for the rise in oil prices was a surprisingly low inventory report for last week from the American Petroleum Institute. With growing demand and a reduction in inventory demand, naturally prices will rise. This is a strong change from the nearly year-long trend of high inventory levels and waning demand for energy and fuel. Americans cut transportation usage significantly last year to account for higher fuel costs for the first half of 2009, and economic instability.

Some analysts have called for $75 per barrel for oil by year’s end. But, as investors are returning to less “safe” investments like equities, cash holdings are likely to diminish, further affecting the dollar. Gold has floundered of late as well because of this factor. It seems quite possible that the $75 mark could easily be reached well before year’s end.

Of course, it will be hard to sell Americans that the good news about economic recovery is that you can look forward to paying $3 or more per gallon for your fuel again. If more people find jobs to pay for their gasoline, though, the sales job would certainly be made easier.

Neil Kokemuller

LiveCharts.co.uk

Neil Kokemuller is an Associate Professor of Marketing at Des Moines Area Community College in Des Moines, Iowa, USA. He has a MBA from Iowa State University. He is also in house stock market commentator at Live Charts UK, where you can find real time charts and share prices .

Copyright © 2009 Live Charts

Please note: The information provided in this article is intended for informational and entertainment purposes, and not as advice for financial decisions or investments. Actions taken on the basis of the information shared is at the sole risk and discretion of the individual. Currency investment poses significant risk of loss.

Live Charts Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in