Thursday, September 11, 2008

Oil Roundup : 09/11/08

(Disclaimer: This article has no information related to September 9/11 attacks. I plan to do these "oil roundups" more frequently, and the timing was merely coincidental.)
Oil today closed at ~101 $/bbl, down from its July highs of 147 $/bbl. Meanwhile, gas prices in the gulf coast are rising, in anticipation of Hurricane Ike's landfall later this week. More from the AP's Money Minute


In related news, Petroleo Brasileiro (PBR) also reported a significant offshore medium crude-oilfield discovery, sending the prices of its shares up 6% (on the US markets) while oil was falling. A study by Masters Capital Management found that oil prices were indeed linked to speculation by large financial investors. I do not find anything wrong in speculation; some risk-taking is always good for the markets. However, I will read the report in greater detail to find whether they uncovered evidence for market manipulation.

Summing up, although crude prices seem to be falling because of institutional investors/stronger dollar/weakening oil demand, analysts believe that market fundamentals indicate an upward trend in oil prices.

Previous articles by Nari on price speculation:
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