Last week oil prices took a hard jump to almost $90 a barrel on the New York Mercantile exchange.
Compared to January’s price of $32 a barrel, high oil prices can hurt our economy that is struggling to recover.
Who’s to blame?
On our list…
The Fed.
Its purchase of $600 billion in government bonds is not helping the price of oil in anyway. A healthier economy means people buying more oil, in which demand takes over and pushes the price.
Second–the Fed’s move makes the dollar weaker, giving foreign currencies the oil-buying power and in turn making traders buy up oil futures… increasing prices.
Nigeria
Nigeria temporarily suspended an oil rig that was attacked by gunmen today. The rig, owned by oil company Afren, has been a victim of the Niger Delta’s criminal gangs who steal oil and hold hostages for ransom. The attack has oil prices hitting a two-year high today.
China
Their double-digit percentage economic growth and ballooning number of car owners have oil consumption numbers soaring. In fact- China has been eating so much oil it decided to stock up like a squirrel for the winter. It wants to avoid their previous 7 months of fuel industry drawdowns. Their demand push is here to stay, and some Morgan Stanely analyst have oil hitting the century mark by next year.
Best Oil Investing,
-Michael Boytano
