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Oil prices, the U.S. dollar, and equity markets continue to be conjoined at the hip….
They are all influencing oil prices. Last week, market uncertainty really spooked investors, finally restoring oil back to a realistic and rational price at well below $80 U.S./barrel. As we previously discussed, oil above $80 U.S is a precarious and ludicrous proposition-based on current supply and demand fundamentals. The U.S. Fed chairman stated the obvious last week that the economic recovery will be slower than expected and another bearish U.S. inventory report showed increasing diesel and gasoline inventories with reduced production. As expected, the U.S. oil companies reduced refinery runs to 88.1% from last week’s 91.2% to hold on to their sliding margins. It appears reality has temporally clobbered the traders, fund managers and non-commercial participants (speculators) to other investment avenues for now. The scary part of this whole economic mess is governments have run out of money and new strategies to turn things around.
By: Roger McKnight, Senior Petroleum Advisor
What does the next quarter look like? And how will the hurricane predictions affect the futures markets? Find out in this week’s Energy Report. Sign up by sending your email to: info@en-pro.com.