Oil
Crude oil was down to a one-month low. Consumer confidence was down and investors presume that this is a precursor for diminished oil usage. Even though there has been positive economic news over the last few weeks, the Energy Department reported last week that fuel consumption slipped to the lowest level since June. Oil prices are up 71% this year.
Yesterdat gold went up even more, reaching $1,129 an Ounce.
Battle At OPEC Over Output
The Organization of Petroleum Exporting Countries (OPEC) is meeting today in Vienna, Austria to discuss current output levels. However there is already a big disagreement over whether the current levels should be raised or lowered.
Saudi Arabia, Kuwait, Qatar, and the United Arab Emirates want output limits to be raised by 500,000 barrels per day, however Iraq, Angola, and Venezuela believe there is an oversupply and want it lowered. Countries who’s regimes are almost solely supported by their oil revenues want the price to rise to make as much money as they can as fast as they can, while the countries who want higher supply (and therefore lower price) are focusing on long-term global economic growth and not the survivability of their own regimes.
The discussions also center around the pending European Union boycott of Iranian oil coming into force on July 1.
Abdalla El-Badri, secretary-general to OPEC, said in Vienna today that “there is some oversupply in the [crude oil] market”.
OPEC sets supply quotas to try to stabilize prices as high as they can without hurting economic growth. Their current limit is 30 million barrels per day, however current output is actually around 31.9 million barrels per day exceeding their ceiling limits and at a 4-year high in output.
I had no interest on oil. But after reading ythe article Correlation of USD/CAD and Oil I understand that how oil price effects Canadian dollars and also my one of favorite currency pair USD/CAD.
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A weaker dollar trumped a report showing a rise in US oil inventories pushing oil up to near $80 a barrel. Analysts say that the price of oil currently isn't trading on supply and demand but rather based on global stock markets and the fluctuation in the dollar.