Oil Prices are rising early on fears of increasing geopolitical risk and the hope of more stimuli. According to Dow Jones crude-oil futures rallied after an Israeli newspaper reported that the country is testing a nationwide text messaging system for warning people of an imminent missile attack, potentially heightening tensions with Iran. At the same time a larger than expected drop in Japan's GDP is increasing the odds that global economic stimulus is right around the corner. Japan's GDP grew at an annualized 1.4%, down from a 5.5%, expansion in the January-March quarter and well below expectations of a growth rate of 2.7%. Add to that the expectation that imports into the US will be slow due to the inclement weather causing a drop in crude supply somewhere in the neighborhood of 3.5 million barrels in this week's inventory report. Gas and distillates should fall by 3 million barrels as well and refinery runs down 2.0.
Yet at the same time, according to Dow Jones, the International Energy Agency says that the oil market is significantly better supplied than previously thought following a downgrade to estimates of demand in previous years, leaving the world needing less crude from the Middle East just as sanctions bite on Iran's exports, the IEA.
Despites some weather related issues in the Gulf of Mexico Dow Jones reports that BP says output restarted in U.S. Gulf Fields BP says it restarted oil and gas production at its Mad Dog and Atlantis fields in the U.S. Gulf of Mexico. The company is ramping up operations in the Gulf as it recovers from the fallout of the Deepwater Horizon blowout.
Trilby Lundberg is the bearer of bad news as she reports that gas prices jumped 18 cents over the past two weeks, the biggest jump of the yea. She reports that the average cost of a gallon of regular is $3.69 nationwide 8 cents higher than a year ago. Still the good news is that we are still 28 cents lower than we were in April so we have that going for us Yippee!! Chicago is number one in gas and he American League Central with an average $4.23 a gallon. The Lowest price was in Tucson, Arizona, at $3.18.
Natural Gas is finally living up to reality selling off sharply on some cooler weather. A storage leak in La. Also is adding to the oversupply!
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