Saturday, July 5, 2008

Oil Falls $1 on Light Trading

The oil market was open Friday even though it was the July 4th holiday for the rest of the U.S. market. In trading, thanks to tensions easing around Iran's nuclear program and the dollar strengthening against the euro, crude oil fell $1.

Iran seems to be testing the waters on backing off on its nuclear program, if they receive economic benefits in exchange. Recently, the 2nd largest oil producer in OPEC had been threatened by either U.S. or Israeli military attacks unless it halted it nuclear program.

The dollar strengthened on Thursday after some comments from the European Central Bank (ECB) seemed to suggest that their would not be any further interest rate hikes coming thus the dollar did not seem to be in jeopardy.

Additionally, Saudi Arabia has made comments suggesting that it is trying to skate the fine line between supply and demand. They can raise production at anytime, but they believe there is no need currently.

As it has been recently, the news can change quickly, but maybe the rise in prices is starting to halt... maybe even retreat.

No comments: