Oil Prices Rise Higher On Weak Dollar
Crude prices jumped significantly higher today after trading virtually sideways all week last week. Crude oil for August delivery was up $2.33 or 3.4 percent and finished the day on the New York Mercantile Exchange at $71.49 a barrel. This was the highest close since June 12. In early trading on Tuesday June 30 it was up another .76 cents and the forecast is bullish.
One of the factors driving oil higher is the continued attacks on oil interests in Nigeria by rebel militants. Royal Dutch Shell had to close one of its facilities six weeks ago after an attack and a rebel group said it attacked another Shell facility on Monday. Just last week Nigeria’s president offered amnesty from prosecution if the militants turned over their weapons, they declined the offer wanting money from oil companies who they claim are destroying the environment and for members of their groups to be released from jail, the Nigerian government of course, refuses to meet those demands.
Chevron and other U.S. companies also have oil interests in the volatile region of Africa as Nigeria sells 44% of its oil exports to the United States. According to government sources the attacks have at least temporarily pause about 1.26 million barrels per day of oil production. Nigeria is a member of OPEC and produces approximately 2.17 million barrels per day of oil and is the 5th largest foreign oil supplier to the United States.
In addition to the attacks in Nigeria, a positive stock market help buoy oil prices, many traders think a greater economy equals more spending and more spending equals more gas usage. The recent market turnaround has help to raise oil prices since it was trading around $40 in February. Oil has found recent support and resistance levels at $69 per barrel, $70 per barrel and $72 per barrel. So this recent price action may be a breakout sending oil prices significantly higher. Many commodity traders are still in fear of an oil superspike this summer that will make last years $140 a barrel oil look cheap. Some saying we could see prices go well over $200 a barrel.
Gold prices also rose over a dollar to nearly $942 per troy ounce. The precious metal should trade relatively sideways this week as people clean up their portfolios before the July 4th holiday. Gold prices have been strong since around June 12 when the dollar began its clear down trend. The $940 level has also been a key support and resistance level and this breakout signifies to many gold investors that the commodity is headed higher. Some commodity investors believe that we will see gold at $1300 before the end of the year. The bullishness of gold has also brought silver prices off of its June lows of around 13.86. Now trading around the $14.oo per ounce level.
Read crucial experiences to junk silver bag – your own tips store.
Tags: Oil