Protests in Brazil and Increased Demand Help Raise Oil Prices
March 24th, 2009 Posted in Daily Forex News
Crude Oil prices hit $54 yesterday, before settling at $53.62. This price is the highest Oil has been since December 2008, but still significantly lower than last July’s high of $147 a barrel. Crude prices increased yesterday for a number of reasons. However, the 2 main factors were the U.S. banking plan unveiled by U.S. Treasury Secretary Geithner to buy toxic banking assets, and the better-than expected housing data. Also, there were protests in Brazil, which have been going on for 5 days, which have helped put upward pressure on Crude prices.
China announced yesterday that demand for Oil increased by 0.5%, marking a recent reversal. The underlying reason that has led to stability in the Crude Oil market is the supply cuts by the Organization of Petroleum Exporting Countries (OPEC). It seems their strategy has worked, and if they continue to cut the supply, Crude prices are likely to rise further. Additionally, if the U.S. continues to publish good data, and Obama shows that he is able to lead the world out of recession, then Crude prices may hit the $58-$60 price level by week’s end.
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Tags: Brazil Protests, Crude Oil, Geithner, housing data, OPEC, Supply Cuts, toxic banking assets
