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December 24, 2013

December 24, 2013

 

Macroeconomic Factors

  • Employment gains have increased and the unemployment rate is lower.
  • The ISM’s manufacturing index jumped to 57.3, also consistent with growth above 4%.
  • China’s exports are rebounding, with an overall growth target of 7.5% still expected.

Potential Risks

  • Domestic gas prices rose the past month, and will likely continue to rise based on stronger economic data. According to the Associated Press:

“The price of oil moved higher above $97 a barrel Friday, buoyed by stronger economic growth and falling unemployment in the world’s largest economy.

By early afternoon in Europe, benchmark U.S. crude for January delivery was up 27 cents at $97.33 a barrel in electronic trading on the New York Mercantile Exchange. On Thursday, oil rose to near $98 for the first time in five weeks before closing at $97.38, up 18 cents.

U.S. data showed the outlook for hiring is improving and the economy is growing at its fastest pace in more than a year.”

 

  • On the international stage, Iran’s reintroduction to OPEC holds a number of implications for prices at the pump. Experts warn this move could precipitate a global increase in prices. Euro News reports:

“Iran has already tried to get OPEC quotas changed in its favor, restoring market share taken by Iraq, and an increasing number of OPEC members are wondering if their low production costs means they could sell more if the price was lower.”

 

Pricing

December prices have risen to the highest level since earlier in the fall. While the front month price is still lower than it was in September, the futures market still reflects overall higher prices for the time being. We expect that this will adjust to the typical seasonal trends later on in the winter.

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Filed under:Eyes on Energy | by Fuel Expert @ 4:57 pm |