Another Dollar dilemma
Energy Report
by Phil Flynn
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2008-08-21
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quarter of 2008. The declines during the first few months of the year were not entirely surprising because of the significantly war mer we ather and much higher prices relative to the same period in 2007. But, by the time May data were released in late July, it was clear that higher oil prices had taken a toll on the U.S. economy, a fact that became cemented in the minds of many analysts. Suddenly, the market was anticipating further oil demand declines elsewhere in the world, just as supply was beginning to increase. As a result, crude oil prices dropped fairly dramatically in a short period of time, along with prices for gasoline, diesel, and jet fuel."
The IEA then wonders where prices to go from here? They say while they are not quite as confident in forecasting the near-term path for oil prices they do think that crude oil prices may settle in the $120 - $130 per barrel range for most of the remainder of the year, barring any additional major supply disruptions from hurricanes or other events such as the current conflict in Georgia. This is largely due to our projection that year-over-year declines in U.S. oil consumption will not be as large in the second half of the year, in part due to relatively weak consumption in the second half of last year and also to the perceived end of the upward surge in prices. Balancing out the forecasted
decreases in U.S. consumption, we project relatively strong continued demand growth in non-OECD countries. Finally, as prices drop, Saudi Arabia may cut back on its recent increas e in p roduction, which could halt the most recent price decline. Of course, whether or not this scenario unfolds is anyone's guess, but understanding the factors behind the increase and recent decline in oil prices is important in understanding what might come next in the prices we pay at the pump.
Looking for Jack Sparrow, but I don't want to be a pirate. AFP reports that an Iranian and a Japanese tanker were hijacked by pirates off Somalia. That brings the number of attacks to six the past month. The world is still a dangerous place. Seek comfort in a daily subscription to the daily Energy Report. Call Phil Flynn at 800-935-6487 or email me at pflynn@alaron.com
Short October Crude apprx 11289 on rollover stopped apprx 118000
Buy October crude at 11740 stop 11180
Sell October Heating oil 33500 stop 34100
Sell October RBOB at 30800 stop 31000
Buy OCTOBER Natural gas at 800 stop
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| Meet the Author |
Phil Flynn
Phil is one of the world’s leading energy market analysts, providing individual investors, professional traders and institutions with up-to-the-minute investment and risk management insight into global petroleum, gasoline and energy markets.
Energy Report has contributed 227 issues.Our users give the newsletter an average rank of 8.4/10 (24 votes)
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