Oil prices near $72, strike new high for 2009
Crude Oil reaches my ultimate target of $70 per barrel. Now I think the Crude Oil will consolidated in the price range of $65--$75 per barrel before moving up further. An interesting point is that those analysts who were predicting a $20 per barrel for crude oil in FY09, were left dumb founded.
HOUSTON: Oil prices surged again on Tuesday to a new high for the year with investors pouring money into crude markets as a hedge against inflation. Adding to crude's advance was new government data showed an uptick in U.S. demand for gasoline, and a report from oil giant BP PLC that said the world's proved oil reserves fell in 2008, the first drop in a decade.
Benchmark crude for July delivery rose $1.06 to $71.07 a barrel in trading on the New York Mercantile Exchange after earlier touching $71.79.
On Tuesday, it jumped $1.92 to close at $70.01. As the US currency has lost value over the past several months, crude prices have doubled largely from the influx of cash from Wall Street.
Equity markets have rebounded as well on the belief that the worst of the recession is over, and that has helped to pull energy prices higher, said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates.
`That kind of economic optimism easily feeds into expectations that oil demand will be coming back sooner than expected,'' Ritterbusch said.
Supporting that view, crude and gasoline held in U.S. storage facilities tumbled last week as Americans took to the road for the summer driving season, the government said Wednesday.
But the country is still flush with gasoline and oil, and it is the weak dollar that has driven crude prices higher.
Already, there is concerns about how energy prices, while far below last year, may slow any economic recovery. The Energy Department's Energy Information Administration said Tuesday that crude prices will likely average $67 a barrel in the second half of 2009, about $16 higher than the first six months of the year.
A month ago, the EIA's price-per-barrel forecast for the second half of 2009 was $55. The EIA also predicted consumers will be paying $2.70 for a gallon of gasoline by July before prices level off.
In other Nymex trading, gasoline rose by 3.2 cents to $1.9989 a gallon while heating oil fetched $1.8273 a gallon _ up 2 pennies. Natural gas for July delivery fell 2 cents to $3.71 per 1,000 cubic feet. In London, Brent prices rose in tandem with Nymex crude, gaining 81 cents to $70.43 a barrel on the ICE Futures exchange.
Trader and analyst Stephen Schork noted that ``for the thirteenth time in the last 15 sessions, London crude for July delivery posted a new year-to-date high. [From Internet]
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