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October 22, 2013

October 22, 2013

 

 

Macroeconomic Factors

  • Data from the last month does not show much change in world economic prospects.
  • The employment situation has been strong when measured by layoffs (ignoring the shutdown) but modest in terms of net job changes.
  • European economies are somewhat stronger as is the Euro.
  • Chinese growth is over 7.8% for the third quarter, much better than those who expected a “hard landing.”

Potential Risks

Over the past month, gas prices have fallen to their lowest levels in over a year. A number of factors contributed to the move, included what would normally be expected from a seasonal shift.

The National Journal reports:

“A number of factors have spurred the decline, including the seasonal shift to cheaper fuel blends at the end of the summer driving season, decreased likelihood of U.S. intervention in Syria, and booming domestic oil production.

‘Consumer demand is at its highest in the summer, when folks take vacations. In the cooler months, kids are back in school, people go back to work full time, and there’s less of an opportunity for recreational consumption,’ said Tom Kloza, chief oil analyst for GasBuddy.com, a gas pricing and information website.”

Pricing

Earlier in the month, October futures had dropped dramatically from the levels seen in September. This strongly suggested that a significant number of geopolitical issues have been addressed to the general satisfaction of financial markets. However, increased uncertainty due to the US federal government shutdown – as well as a number of terrorist attacks in East Africa – brought the forward curve back to levels indistinguishable from September and August.

 

To download a more detailed version of this report CLICK HERE.

Filed under:Fuel Price Trends | by Fuel Expert @ 1:28 pm |