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Oil Tops $80 Per Barrel on Optimism in US Economic Recovery PDF Print E-mail
Thursday, 11 February 2010
The manufacturing data released in January 2010 has resulted in some optimism concerning the economic recovery in the United States. The manufacturing sector expanded more rapidly than forecast in January. This marks the sixth month in a row of manufacturing expansion in the U.S. The optimism engendered by this data has resulted in increasing oil prices that continued to accelerate upon hitting the $75 mark. According to fund manager Tetsu Emori at Astmax Co Ltd, traders get concerned when prices are at the $75 level. This may have resulted in an overselling in the market. Some traders will find it advantageous to make purchases whenever the price is less than $75 to $80.

Another leading indicator, the Institute for Supply Management Index, registered its highest level since August 2004. This suggests that the United States is coming out of its recession, and that demand for oil may soon increase. He continued improvement in commodities markets was reflected in the gains seen in Australian currency following a likely increased interest rate.

The possible increase in demand for oil has been tempered by the high levels of U.S. crude inventories. The disruptions that occurred at a port in Texas had an only marginal effect on the size of the overall inventories, with gasoline inventories likely having increased by 1.3 million barrels. Presently, shipping traffic has been reopened in the Sabine-Neches Waterway in Texas following the tanker collision and resulting oil spill on January 23.

Reports from the American Petroleum Institute and statistics from the U.S. Energy Information Administration will provide additional data for analysts.

Meanwhile, those in the oil business do not anticipate a real increase in demand, believing that any real economic recovery is yet to be had. Their view of the recovery will likely change only if the level of inventories decreases significantly.

gas suppliers
Comments (3)Add Comment
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written by Billy Jones, February 23, 2010
well that really sucks, higher gas price in the near future!
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written by Virginia Porter, February 23, 2010
here we go again, another market heat up before full economic recovery? That's huge disaster
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written by Amanda Seet, February 23, 2010
i'm predicting $100 per barrel by the end of the year, possible?

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