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Oil Prices Rise for Seventh Straight Week

A drastic fall in gasoline supplies this month has caused gasoline prices to rise for the seventh straight week. The move surprised most energy analysts because of where inventories were declining most rapidly. The Padd 1 gasoline stockpile – notable because it includes the delivery point for the NYMEX – was found to be the major source of declining supply.

“Padd 1 gasoline stockpiles fell 1.2 million barrels to an eight-month low of 52.2 million, 6.2 percent below a year earlier. ‘People are worried about the drop in Padd 1, and lower inventories there can make futures prices rise,’ said Hamza Khan, an analyst at the Schork Group Inc., a consulting company in Villanova, Pennsylvania.”

Additionally, the newest statistics on housing data have been surprisingly positive, suggesting stronger demand for oil in the very near future.

“Housing starts climbed 6.9 percent to a 760,000 annual pace after a revised 711,000 rate in May that was faster than initially estimated, the Commerce Department reported in Washington yesterday. The median forecast of 79 economists surveyed by Bloomberg News called for 745,000.”

Most dramatically, new developments in the ongoing internal conflict in Syria have focused attention on the government of Iran. It is unknown how Iranian officials will react if their allies in the Assad regime are overthrown, but the general consensus is that it will increase tensions in the region. The embedded CNBC segment below features analyst Alireza Nader of the Rand Corporation giving his assessment of the current situation.

If Syria Falls, What Will Iran Do?

It appears as though these factors are all converging to bring oil prices off of their recent lows – and this is only the beginning.

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