Oil prices are going to try to make it five days in a row of higer prices as the market seems to be getting support from the rising US stock market and hopes that the ECB will begin a bond buying program to help out beleaguered Euro zone rate challenged countries. As the world gets geared up for more stimulus and word that Saudi oil production is rising seems to suggest either that demand is getting better or the Saudi's are trying to make sure the market is well supplied ahead of any impending conflict.
Bloomberg News reported that Saudi Arabia pumped crude at the highest level in more than three decades in June, overtaking Russia as the world's largest oil producer during the month, according to the Joint Organization Data Initiative. Of course the reason why the Saudi's are ramping up might cause more speculation as you can perhaps look at it two ways. Perhaps demand is getting better or cynically the Saudis are trying to cushion the global oil market from a price shock if there is an attack on Iran. Bloomberg sat that Saudi Arabian output rose 3 percent to 10.1 million barrels a day in June from May as it exported the most in a month since November 2005, according to statistics the government submitted to OPEC and posted on JODI's website today. Better be careful.
China's housing prices went up? That is what happened. MarketWatch reported that Chinese policy makers seen as less inclined to cut interest rates after data showed real estate prices rising in a majority of major cities. In China the Statistics Bureau figures for July, released over the weekend, showed new home prices rising in 49 of 70 Chinese cities, the broadest-based gains in 14 months.
Of Course the other factor supporting oil last week was the drawdown across the board in crude oil supply. Bad weather and refinery glitches helped drive oil and gas supply lower. This week we shout rebound. Look for crude to rise by 3.0 million barrels, Gas by 1.5 million barrels and distillates by 2 million barrels. Also Brent crude was strong as the market adjusted to the fact that North Sea production will be down 17% in September due to maintenance.
Gas prices were on the rise and increased 3 cents nationwide. Most of the increases were on the west coast as they are still coming to grips with that refinery fire. In the Midwest prices are starting to fall as the refineries are coming on line and pipelines are not leaking .RBOB futures are coming back down to meet crude price after the sharp buying in recent weeks. The Long Heat short RBOB spread continues to look attractive.
5 days in a row on China data and anticipation of an ECB meeting. Saudi Production on the rise improving economy trending stock market.
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