Tuesday August 04, 2009

NYMEX crude oil prices hit $72.20 on rising outlook and falling dollar

channelnewsasia.com :

Crude oil prices shot higher for the third session in a row on Monday [4 Aug 2009], driven by improved economic recovery prospects and a weaker dollar. NYMEX light sweet crude for Sep 2009 delivery jumped $2.13 to close at $71.58 a barrel. Live oil prices hit an intraday peak of $72.20, its highest level since late June. EUR/USD forex rates soared above 1.44, returning to its highest levels in 8 months. A weaker US dollar makes USD-priced oil prices more attractive to buyers with stronger currencies.

The dollar fell largely because of better-than-expected readings on industrial activity in the US, the eurozone and China. While the outlook for oil demand appears to be brightening, crude supplies are at risk of falling short. A disastrous energy crunch is looming because most of the major oil fields in the world have passed their peak production, said IEA chief economist Fatih Birol. He added that an oil crunch within the next 5 years could jeopardise recovery from the global recession.

- All this talk about green shoots and economic recovery has propelled the S&P 500 back up above the 1000 level, and at the same time the falling US dollar has also driven oil prices back above $70 and gold prices over $950. In fact USDX, the US dollar index, has fallen below 78 support and looks headed toward 76. All rather important levels, no doubt about that.

What would really get things going on the energy side of things would be oil prices breaking above $75. It has tried - and failed - twice in the past 2 months. Who knows, third time could be the charm, but watching things going vertical sometimes tends to get a little anti-climatic. I'll be letting this play out and see if the 50/200-dma levels start to catch up over time.

See also :

1. NYMEX crude oil prices recover from $60.01 low on oversold rebound
2. NYMEX crude oil prices fall below critical $60 support level
3. NYMEX crude oil prices rise above $60, snapping 3-day decline
4. NYMEX crude oil prices rise to $68 on brighter economic outlook

(2009-08-04 19:36:16 SGT) [Energy] Permalink

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