Monday was the fifth straight day of oil’s rise, with the benchmark for September delivery up to $96.06 per barrel (a difference of 5 cents) in electronic trading on the New York Mercantile Exchange.
A preliminary August index of consumer sentiment that was published last Friday by Thomson Reuters in collaboration with the University of Michigan showed, contrary to economists’ anticipations, that consumer sentiment was actually at its highest since May. That’s certainly good to hear, especially in light of renewed strengths in retail sales and a generally enlivened housing market.
Ric Spooner, chief market analyst at CMC Markets in Sydney, said the rally may be nearing the end of its course, as prices “are pushing into what many people would regard as the higher end of the neutral range for oil.”
“The market is fairly well covered at the moment in terms of supply capacity,” he said. “We are getting to a stage where the risk is starting to look to the downside.”
Last Friday, speculations rose that the U.S. would dip into its Strategic Petroleum Reserve in order to combat crude’s rising costs. Some analysts had their doubts, though, based on the fact that the U.S. wasn’t exactly convincing other countries to do likewise.
Last summer, the U.S. did in fact touch the Reserve, but without much success. Indeed, oil dropped almost 5 percent when the government released 30 million barrels from the Reserve on July 23, Bloomberg reported. But in the following week, oil bounced back, and eventually ended the year higher than it had started.