Best of the Week
Most Popular
1. Five Charts That Show We Are on the Brink of an Unthinkable Financial Crisis- John_Mauldin
2.Bitcoin Parabolic Mania - Zeal_LLC
3.Bitcoin Doesn’t Exist – 2 - Raul_I_Meijer
4.Best Time / Month of Year to BUY a USED Car is DECEMBER, UK Analysis - Nadeem_Walayat
5.Labour Sheffield City Council Election Panic Could Prompt Suspension of Tree Felling's Private Security - N_Walayat
6.War on Gold Intensifies: It Betrays the Elitists’ Panic and Augurs Their Coming Defeat Part2 - Stewart_Dougherty
7.How High Will Gold Go? - Harry_Dent
8.Bitcoin Doesn’t Exist – Forks and Mad Max - Raul_I_Meijer
9.UK Stagflation Risk As Inflation Hits 3.1% and House Prices Fall - GoldCore
10.New EU Rules For Cross-Border Cash, Gold Bullion Movements - GoldCore
Last 7 days
Jim Rickards: Next Financial Panic Will Be the Biggest of All, with Only One Place to Turn… - 20th Jan 18
Macro Trend Changes for Gold in 2018 and Beyond - Empire Club of Canada - 20th Jan 18
Top 5 Trader Information Sources for Timely, Successful Investing - 20th Jan 18
Bond Market Bear Creating Gold Bull Market - 19th Jan 18
Gold Stocks GDX $25 Breakout on Earnings - 19th Jan 18
SPX is Higher But No Breakout - 19th Jan 18
Game Changer for Bitcoin - 19th Jan 18
Upside Risk for Gold in 2018 - 19th Jan 18
Money Minute - A 60-second snapshot of the UK Economy - 19th Jan 18
Discovery Sport Real MPG Fuel Economy Vs Land Rover 53.3 MPG Sales Pitch - 19th Jan 18
For Americans Buying Gold and Silver: Still a Big U.S. Pricing Advantage - 19th Jan 18
5 Maps And Charts That Predict Geopolitical Trends In 2018 - 19th Jan 18
North Korean Quagmire: Part 2. Bombing, Nuclear Threats, and Resolution - 19th Jan 18
Complete Guide On Forex Trading Market - 19th Jan 18
Bitcoin Crash Sees Flight To Physical Gold Coins and Bars - 18th Jan 18
The Interest Rates Are What Matter In This Market - 18th Jan 18
Crude Oil Sweat, Blood and Tears - 18th Jan 18
Land Rover Discovery Sport - Week 3 HSE Black Test Review - 18th Jan 18
The North Korea Quagmire: Part 1, A Contest of Colonialism and Communism - 18th Jan 18
Understand Currency Trade and Make Plenty of Money - 18th Jan 18
Bitcoin Price Crash Below $10,000. What's Next? We have answers… - 18th Jan 18
How to Trade Gold During Second Half of January, Daily Cycle Prediction - 18th Jan 18
More U.S. States Are Knocking Down Gold & Silver Barriers - 18th Jan 18
5 Economic Predictions for 2018 - 18th Jan 18
Land Rover Discovery Sport - What You Need to Know Before Buying - Owning Week 2 - 17th Jan 18
Bitcoin and Stock Prices, Both Symptoms of Speculative Extremes! - 17th Jan 18
So That’s What Stock Market Volatility Looks Like - 17th Jan 18
Tips On Choosing the Right Forex Dealer - 17th Jan 18
Crude Oil is Starting 2018 Strong but there's Undeniable Risk to the Downside - 16th Jan 18
SPX, NDX, INDU and RUT Stock Indices all at Resistance Levels - 16th Jan 18
Silver Prices To Surge – JP Morgan Has Acquired A “Massive Quantity of Physical Silver” - 16th Jan 18
Carillion Bankruptcy and the PFI Sector Spiraling Costs Crisis, Amey, G4S, Balfour Beatty, Serco.... - 16th Jan 18
Artificial Intelligence - Extermination of Humanity - 16th Jan 18
Carillion Goes Bust, as Government Refuses to Bailout PFI Contractors Debt and Pensions Liabilities - 15th Jan 18
What Really Happens in Iran?  - 15th Jan 18
Stock Market Near an Intermediate Top? - 15th Jan 18
The Key Economic Indicator You Should Watch in 2018 - 15th Jan 18
London Property Market Crash Looms As Prices Drop To 2 1/2 Year Low - 15th Jan 18
Some Fascinating Stock Market Fibonacci Relationships... - 15th Jan 18
How to Know If This Stock Market Rally Will Continue for Two More Months? - 14th Jan 18
Everything SMIGGLE from Pencil Cases to Water Bottles, Pens and Springs! - 14th Jan 18
Land Rover Discovery Sport Very Bad MPG Fuel Economy! Real Owner's Review - 14th Jan 18
Gold Miners’ Status Updated - 13th Jan 18
Gold And Silver – Review of Annual, Qrtly, Monthly, Weekly Charts. Reality v Sentiment - 13th Jan 18
Gold GLD ETF Update.. Bear Market Reversal Watch - 13th Jan 18
Stock Market Leadership In 2018 To Come From Oil & Gas - 13th Jan 18
Stock Market Primed for a Reversal - 13th Jan 18
Live Trading Webinar: Discover 3 High-Confidence Trade Set-Ups - 13th Jan 18
Optimum Entry Point for Gold and Silver Stocks - 12th Jan 18
Stock Selloffs Great for Gold - 12th Jan 18
These 3 Facts Show Gold Is Set to Surge in 2018 - 12th Jan 18
How China is Locking Up Critical Resources in the US’s Own Backyard - 12th Jan 18
Stock futures are struggling. May reverse Today - 12th Jan 18
Three Surprising Places You See Cryptocurrency - 12th Jan 18
Semi Seconductor Stocks Canary Still Chirping, But He’s Gonna Croak in 2018 - 12th Jan 18
Land Rover Discovery Sport Panoramic Sunroof Questions Answered - 12th Jan 18
Information About Trading With Alpari And Its Advantages - 12th Jan 18

Market Oracle FREE Newsletter

6 Critical Money Making Rules

What's Behind July's 9% Rise in Crude Oil Prices

Commodities / Crude Oil Aug 06, 2013 - 12:53 PM GMT

By: Money_Morning

Commodities

Tony Daltorio writes: U.S. crude oil prices finished the month of July on a very positive note. Front-month futures ended July at just above $105 a barrel.

That put those futures up about 9% for July, the largest one-month gain for crude oil in 11 months.


Part of the reason for the upward move is the usual geopolitical tension in the Middle East and North Africa with Egypt at the forefront right now.

Current OPEC oil production is also a problem.

The International Energy Agency's latest monthly report showed OPEC output dropped in June by 370,000 barrels a day. Production fell in Iraq, Libya and Nigeria, and Saudi Arabia was not able to compensate for the lost output entirely.

Saudi production is already at 9.7 million barrels a day, not far below its 2012 peak output of 10.1 million barrels a day. So many in the industry believe the Saudis have little spare production capacity left to make up for shortfalls elsewhere in OPEC.

Another key reason for oil's rise is literally physical, as pointed out by Money Morning Global Energy Strategist Dr. Kent Moors.

U.S. government numbers showed that oil inventories at the Cushing, OK delivery center fell for the fifth straight week to levels not seen since April 2012. New infrastructure is moving oil from the former oil choke point at Cushing to facilities on the U.S. Gulf coast.

There are other very fundamental reasons behind oil's move higher....

What's Driving Oil Prices Higher

First and foremost is an unexpected increase in demand for oil from the developed world.

In the United States, oil refineries are processing the most crude oil since 2005.

Part of that is due to increased refining capacity with the opening this year of the largest U.S. refinery - the Motiva refinery in Port Arthur, TX, which is owned by Royal Dutch Shell and Saudi Aramco. Once again, improved infrastructure - pipeline and rails - has raised refineries' access to crude oil.

This other source of increased demand may surprise you...

Oil demand in Europe has risen recently, contributing to the price jump. Government data for April and May showed that overall oil demand in Europe rose for the first time in two years.

Data shows that demand for diesel rose now for three months in a row. That is a sure sign of trucks making more trips (as a result of increased economic activity), as reported by David Wech, an analyst at JBC Energy in Vienna, to the Financial Times.

The ECB's less-aggressive stance than the Fed's seems to be working in reviving the European economy.

The first consecutive gains in oil demand since the beginning of 2011 mean that Europe will have its first quarter of growth in crude oil demand since 2010.

A further indication of strong European demand for oil is the fact that Brent crude oil futures are in backwardation - that is, traders are paying a premium for oil for immediate delivery.

QE and Crude Oil Prices

One final reason for oil's rise is the continued easy monetary policies followed by the developed world's central bankers.

There is a lot of liquidity in the financial markets, thanks to the Fed, the Bank of Japan and the European Central Bank. A lot of money is pouring into stocks - the stock market's recent rally is predicated on traders' belief that "tapering" of asset purchases by the U.S. Federal Reserve will now not likely happen until early 2014.

People worried about preserving their wealth are using crude oil as an insurance policy - a position like the one gold has held for so long.

Indeed, Money Morning's Moors says that the Fed's QE (quantitative easing) policy is positioning crude oil as "a store of market value."

With loose monetary policies being with us for the foreseeable future, expect oil prices to rise long-term.

And if China and the emerging world resume their torrid growth, oil prices may surprise to the upside even more.

In fact, crude oil prices are well on their way to $150 a barrel by the decade's end. For the full story, check out this Money Morning investor report on oil - free for our members!

Source :http://moneymorning.com/2013/08/05/whats-behind-julys-9-rise-in-crude-oil-prices/

Money Morning/The Money Map Report

©2013 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2018 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

6 Critical Money Making Rules