Egyptian uprise catapults oil prices

Register
Jul 5, 2013

 

Crude explodes over $102 per barrel

Wall Street may have been closed for the 4th of July, but news flowing out of Egypt set off fireworks in the oil markets. Recent political unrest in Egypt led to the ousting of Egyptian President Mohammed Morsi. Morsi was overthrown as a result of widespread criticism across Egypt that he was not sharing power and only representing the interests of his political backers, the Muslim Brotherhood. This helped catapult oil over the $100 mark on fears that turmoil in Egypt could interrupt crude oil shipments through the Suez Canal and disrupt neighboring countries like Jordan, Saudi Arabia, and Libya.

While Egypt only accounts for less than 1 percent of global oil production, nearly 2 million barrels of other nations’ oil are shipped through the Egyptian Suez Canal per day, which makes the canal a crucial point to the international crude oil markets.

Crude oil also rallied on news that U.S. oil stockpiles were much lower than expected following Wednesday’s Energy Stocks Report, which stated that oil inventory stocks were down 10.3 million barrels from the previous week.

In addition, crude oil prices increased into the 4th of July weekend in anticipation of typical high seasonal demand for gasoline. West Texas oil for August delivery traded at $102.60 per barrel in the mid-morning hours on Friday, up over $6 (+6.3%) from the previous week.
 
The Euro falls

The euro currency continued to fall this week on news that the European Central Bank (ECB) will keep its key interest rate at 0.5 percent, which is at record low levels and down from 1.5 percent in October 2011. As a result of this decision, the U.S. dollar had a great Fourth of July as it strengthened against the euro. As the US dollar went up, the euro lost nearly two cents in value, falling to $1.28, the lowest price in nearly two months.
 
No boom in the grain trade

The grain markets continued adjusting to last week's USDA report, which revealed planted corn acreage of 97.38 million acres, much more than expected. During this week, December corn lost another 15 cents per bushel (-2.9%), crumbling to a two-year low at $4.96 per bushel. Production will now depend on the critical July and August weather.

Comments

The Big Dog's back

I stubbed my toe Wall Street. Does that qualify to raise oil prices?

mikeylikesit

yes, that will do..

beepx22

Crickey Dog don't tell them, they'll raise them over anything

The Hero Zone's picture
The Hero Zone

While it is good to stay abreast of what's going on in the financial world I find headlines like this misleading. It may as well read "Bad childhood leads Jason Voorhees to murder", only to have the text of the article indicate he is only accused and it may be a contributing factor.

It isn't just this article written by the Register but you hear and see it everywhere. On the radio it is something like, "Unemployment up 1% because of X announcement". Is it really? Is there a direct, stated correlation between the two that you can announce that with such specificity? Has every other factor been excluded so that it conclusively was the result of that one incident?

Ugh. I'm in a mood tonight so I certainly must sound feisty. But it is NEVER, EVER as simple or obvious as it seems - and you don't need an economics degree nor tin foil hat to see that.

Ok...just take a breath...

Now that I have found my happy place, I would like to ask a professional question of the Register. Not in critique but in curiosity as I honestly don't know the industry standards and am seeking honest enlightenment.

"Presuming that words like 'suspect/ed' must still be used in criminal reports until a final verdict is given, is there no regulation in using similar phraseology for issues like this - even when it does seem to be an 'obvious' factor?"

Contango

Re: "While it is good to stay abreast of what's going on in the financial world"

Quantitative analysis or "The Quants," (i.e. computer driven trading) essentially runs the Mkts.

The Quants tend to react to and with one another.

Attempting to ascribe a rationale to Mkt. movements can often be a futile exercise and probably rightly belongs in the category of: Mystery of the Universe.

http://www.investopedia.com/term...

deertracker

I call it redistribution of wealth. From "The havenots to the haves"!

Contango

Re: "'The havenots to the haves'!"

Compared to the poverty associated with much of the world, the U.S. is a nation of:

Haves and Have Mores.

Institutional investors and money mgrs., both foreign and domestic, i.e. banks, ins. cos., public and private pension plans, mutual funds, private equity and hedge funds control approx. 90% of the U.S. Mkt.

The Big Dog's back

Ahhhh yes pooh, we should be thankful we have more than the nomad in the desert. Praise to Corporations. Praise to the wealthy. Hallelujah! Hallelujah! Rejoice!

Contango

So do you have any retirement savings or money in the bank DERPY?

PaulYall

Spelled "have nots"

The Hero Zone's picture
The Hero Zone

The have-nots will never "have" if they don't participate in the market system. It is for this exact reason why I would prefer a private option for my Social Security. Allow me as an average citizen to participate in the wealth generation. If I don't trust the private options, I could always stick with the government and, by doing so as many who receive benefits can probably tell you, you will never become a "haver".

It is a cruel but well-meaning system, but once on it without a path off, there will never be that kind of advancement you want to see in people. They will forever be excluded from the modern market and financial practices. That is why I can't feel animosity for people receiving benefits...it's a life of mere subsistence with no hope of advancement.

Contango

Re: "The have-nots will never "have" if they don't participate in the market system."

By virtue of living in the U.S., those on the lowest rung of the socio-economic ladder are endowed with greater wealth than at any time in the history of the world.

http://reason.com/archives/2007/...

The Hero Zone's picture
The Hero Zone

It's true, I would rather be destitute by American standards in America than in China, India, and even other developed nations. But it still doesn't change the fact there are countless millions who will never be able to realize the same lifestyle as others as the hand that helps up is the same hand that can be a very frustrating glass ceiling.

I want more participation and education about how finances work. Economics shouldn't be an elective nor should it be an exclusive practice. Reading, Writing, Return on Investment. Not only would it empower the individual, it would put politicians in the hot seat for screwing things up in the investment world as they aren't just affecting the easily-straw-manned "rich fat cats". They would be screwing over the average citizen, the citizen receiving some kind of invest-able benefit.

Accountability. Accountability for the citizen investing. Accountability for the decision maker not just rubber-stamping an emotion-fueled, illogical bill. Accountability for the corporations who would be responsible for growing the wealth entrusted to them.

Contango

Re: "I want more participation and education about how finances work,"

I'd like it too, but the winds in this country are directed at punishing success.

Watch Europe, they're cannibalizing themselves. They're rooting out private assets attempting to prop up a failed socialistic economic system.

In many ways it resembles the 1930s. Many believe that the Great Depression began in Europe as a banking crisis and later spread to the U.S.

http://en.wikipedia.org/wiki/Cre...

IMO, one has a MARVELOUS textbook example in what-not-to-do in the Soviet Union.

The hubris of the American Progressives (Fabian Socialists) allows them to believe themselves to be smarter than the Russians. (As IF the Russians are stupid. LOL)

THEY will succeed in their authoritarian socio-economic approach where the Soviets failed.

FA Hayek illustrated this sense of hubris brilliantly in the "Road to Serfdom."

Remember: The gods HATE hubris.

I enjoy reading Martin Armstrong:

http://armstrongeconomics.com/ar...

I don't always buy into his theories, but he'll DEFINATELY make ya think.

deertracker

Who cares about comparisons pooh? Should we as Americans be thankful for a sanitation system?

Contango

Re: "Who cares about comparisons,"

So you aren't a "caring" liberal? (Bleep) 'em eh?

Re: "Should we as Americans be thankful for a sanitation system?"

Yes.

Thousands die and millions become ill worldwide annually from water-borne illness and polluted water.

Compared to the rest of the world you're living in paradise and whining about it DERPtracker.

The Big Dog's back

Yesss masta.

Contango

Re: "Yesss masta."

How is that not racist DERPY?

Second request: So do you have any retirement savings or money in the bank?

The Big Dog's back

Yesss masta.

Contango
The Big Dog's back

Yesss masta.

deertracker

Yes pooh, thousands also die right here from legally prescribed drugs too. Your point? Nevermind, you NEVER have one. Silly me!

Contango

Re: "thousands also die right here from legally prescribed drugs too,"

WAY off-topic DERPY II.

And MILLIONS MORE die worldwide WITHOUT the benefit of prescription drugs.

So OBVIOUSLY ONLY wealthy societies like the U.S. have access to prescription drugs:

The Haves and Have Mores.

deertracker

You can let go of the "t"! Only the U.S. has prescription drugs? News to me.

JudgeMeNot

You can't read. You just can't take the Idiot out of some people!

Contango

Re: "Only the U.S. has prescription drugs? News to me."

"...wealthy societies LIKE (emphasis mine) the U.S...."

DERP!

So DERPY II, do you have any retirement assets? If so, where are they invested; mutual funds, bank, panty drawer?

JudgeMeNot

You won't get an answer to that question Contango from lil dog. You already know the truth.

Contango

Re: "You won't get an answer,"

She had 'em once, but she wrote that they were "stolen."

I responded: Oh, you invested wrong?

She won't admit that she invested wrongly and take responsibility.

ALWAYS the victim - you know? Everyone else's fault except hers.

Why else do you think that she LOVES the good ol' Blamer-in-Chief??? :)

JudgeMeNot

I know. I just figured the love was because of low information. Most of the comments point in that direction.

Contango

Re: "low information."

More than likely a contributing factor.

Ignorance can be cured, stupidity is much more difficult.

The Big Dog's back

1 bourbon, 1 scotch, 1 pooh.

deertracker

the plan was just 1 of the bourbons and only 1 scotch anyway!

Contango

"EL-ERIAN: Anyone Following Egypt Needs To Keep An Eye On One Useful Measure, And It's Not The Stock Market"

http://www.businessinsider.com/e...

Mohamed A. El-Erian is a thoughtful analyst worth listening to.

KURTje

Deertracker clear winner. Anhedonic clear loser.