Supply constraints continue to overcome the crude oil markets as this time prices recorded another all time high of $129.60 per barrel as the June contract expired. The massive rise in prices lately as OPEC assumes is not due to insufficient supply but rather caused by speculators. The US House of Representatives passed legislation yesterday allowing the US to sue OPEC for not wanting to pump more crude in the market in order to ease the current prices.
The markets have attracted many investors in the past couple of days as they saw potential in profits. With the fund inflows that were welcomed to the crude markets lately have kept prices rallying. The contract had gained $2.02 as it closed at $129.07 while recording a low of $126.67 per barrel before opening the new July contract.
The crude market remain bullish also supported by the weak US as investors entered the commodities market as a hedge against inflation and the falling dollar while it is cheaper for foreign investors as they hold a stronger currency. As the markets became an attraction to many investors, prices continued their surge adding to economies inflationary pressure while there is a global slowdown. Today the contract opened at $129.10 while recording a high of $129.20 per barrel and a low of $128.85 per barrel.
The EIA report is scheduled to come out today showing that crude is expected to show an increase of 1.5 million barrels while gasoline is projected show a rise of 0.3 million. As for distillates which include heating oil and diesel is predicted to show a slip of 0.1 million barrels. The demand by the US which is the biggest energy consumer is dampening as energy prices continue to surge making it difficult for consumers especially as the summer season is coming just around the corner with increased driving.