Oil Prices Rises to above US$79, Gold Prices hit US$1,060..
20 Oct 2009 - The risks of rising inflation in the next few years have risen. Oil prices are now near US$80; Gold Prices hit above US$1,060, Silver Prices at US$17.80...
If Oil prices continue to go up, it might derail Global Economic Recovery, in my opinion, the risk of a double-dip recession in Year 2010 or even 2011 has risen.
Regards.
Dennis Ng, http://www.MasterYourFinance.com
NEW YORK (AP) -- Oil prices jumped above $79 a barrel to a 2009 high on Monday before falling back as investors looked to U.S. corporate earnings this week for signs consumers may be regaining confidence.
Benchmark crude for November delivery traded up 18 cents at $78.71 on the New York Mercantile Exchange by midday. The contract added 95 cents to settle at $78.53 on Friday.
Because oil is bought and sold in dollars, crude essentially becomes cheaper for global investors and there has been a run recently on the Nymex.
A barrel crossed $75 for the first time on Wednesday and came close to $80 Monday morning.
Last week, crude broke out of a five-month trading range between $65 and $75 a barrel on a weakening U.S. dollar and expectations that oil demand will eventually recover as the global economy grows next year. A growing economy increases demand for energy.
Despite several straight days of gains in oil prices, analysts remained cautious.
"The spectacular gains were overwhelmingly driven by financials and market optimism rather than fundamentals, said JBC Energy in Vienna. "We see no reason why prices should not return to the $65-$75 per barrel bandwidth."
JBC cited considerable spare output capacity at OPEC, low profit margins for refiners, a massive stock surplus of products such as diesel and heating oil and lackluster demand among industrialized nations among the "bearish fundamentals" weighing on the market.
"The move from $75 to $78 has been done ... without any real fundamental development," said Olivier Jakob of Petromatrix in Switzerland. "This is a very technical market and technical markets fall as fast as they rise."
Investors will be eyeing third quarter results from retailers this week for clues about the strength of the U.S. consumer. Apple Inc., McDonald's Corp., appliance maker Whirlpool Corp. and toy maker Hasbro Inc. are among those reporting this week.
On Monday morning in New York, the 16-nation euro rose to $1.4940, just shy of a 14-month high of $1.4967 hit last week, from $1.4899 late Friday
In other Nymex trading, heating oil rose less than a penny to $2.03 a gallon and gasoline for November delivery was essentially flat at $1.9775 a gallon. Natural gas for November delivery rose 11 cents to $4.89 per 1,000 cubic feet.
In London, Brent crude for December delivery fell 2 cents to $76.97 on the ICE Futures exchange.