Crude Prices Bounce Back Near $67 As Stocks Spike
September 28th, 2009 | File Under : Mining Stock - Natural Gas - Oil and Gas
After sliding about 8% last week, oil prices ticked back near $67 Monday, tracking a rise in equities.
Crude oil for November delivery rose 82 cents and settled at $66.84. In midday trading, prices topped $67, rising 2%.
“The main catalyst supporting energy prices is the stock market,” said Liberty Trading Group President James Cordier. “We’re getting a nice rally after last week’s selling.”
The S&P 500 fell more than 2% last week, its biggest selloff in nearly three months. But investors delivered a spike in stock prices Monday on merger announcements.
“You also have to throw the Iranian situation in every conversation about energy,” added Cordier.
Iran revealed the existence of a second uranium enrichment facility last week, prompting President Obama and leaders of Britain and France to threaten further sanctions over the country’s nuclear program. The republic test-fired two types of long-range missiles Monday.
“The situation has heated to a point where military action could take place at any time. Iran has said many times that being attacked would mean it would cut off access to the Strait of Hormuz,” Cordier said. “That puts a huge worry on the energy supplies coming out of that region. It’s not in Iran’s best interest, but Iran doesn’t always do what’s in its best interest.”
But without outside influences, Cordier thinks crude prices are headed lower, trading down near $60 in October.
“Going into the fall, demand for energy is at its lowest. We’re getting a bounce today because of equities, but it’s just a rally in a bear market.”
Gasoline prices. The national average price for a gallon of regular unleaded gas decreased to $2.499, down half a cent from the previous day’s $2.504, according to motorist group AAA.
This is the seventh consecutive day the price of gas has declined.
Find More Other News : Natural Gas Prices - Oil Prices - Oil Prodcution