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The stock market is on a tear, fueled higher by better than expected corporate earnings. So says Phil Flynn of PFG Best Research who stated: "There is no doubt that the stock market led the oil market higher."It stands to reason. When the economy does better, there is more demand for oil. The August contract was up $2.20 to $77.15, up form $74.25. London Brent crude was up $2.28 to $76.85
The oil rally was also driven by a weaker dollar. A drop in the dollar is bullish for oil because oil is cheaper for buyers.
Globally, The International Energy Agency forecasts oil demand to be up 1.35 million bpd next year to 87.84 million bpd. barrels per day (bpd). Demand this year is expected to be up 80,000 bpd.
According to a Reuters survey, stockpiles are predicted to drop 1.4 million barrels in the week ending July 9, after falling 5 million barrels the week before.
Distillate inventories may be up 800,000 barrels and gas may be up 100,000 barrels.
If corporate earnings keep coming in at the high end and the stock rally continues, look for oil to hold here or even trade higher.
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Reader Comments (Page 1 of 1)
7-13-2010 @ 9:22PM
Iridium said...
Well the stock market went up 80% from the lows and the economy really didn't get any better and the US is actually using less oil so there goes that bull argument.
The bullish arguments for oil are such a trainload of BS that it is hysterical to even listen to them anymore. Other than the fact that the trainload of BS causes all of us to pay more at the pump.
For that it would be fun to throw oil bulls in front of speeding trains.
7-13-2010 @ 9:30PM
william lindblad said...
BETTER CHANCE AT SOMEONE FINDING A LIVE DO-DO BIRD.
(THROW IN A FEW CARRIER PIGEONS TOO!)
Wait until Jan when the snow is on the ground and the only thing going South will be Wall St.