Say goodbye to 50. Oil is officially a senior citizen.
Over the past five days oil has closed over $60. Take a look at the chart:
In terms of technical analysis and chart reading, you couldn’t ask for a better uptrend formation. Except for a brief breaking of the trend, which occurred in early November ’04, oil has been making higher highs and higher lows for the past 3 years.
On Wednesday the goop hit a 1-month high of $62.50, only $0.39 under its all time high set back in July.
This morning oil prices again flirted with record highs on major supply concerns.
The weekly report put out by The U.S. Energy Department showed significant declines in the nation’s gasoline inventories. Gasoline inventories fell by 4 million barrels to 205.2 million barrels, 3 percent below last year’s level.
This coupled with doubts that U.S. refineries can not recover from recent shutdowns pushed prices higher.
Over the past weeks seven refiners have reported problems of one kind or another. Among the majors, Chevron’s El Segundo, California, and BP PLC’s Texas City refineries were forced to halt operations and Exxon Mobil’s plant in Joliet, Illinois was completely shutdown due to uncontrolled fires.
Together these refineries account for 10% of the total U.S. refining capacity, about 1.7 million barrels per day.
Incredibly, oil prices are close to 40% higher than a year ago.
Throughout the day oil prices tempted $62.
Natural gas futures also rose to a nine-month high yesterday. U.S. reports outlined that supply gains were considerably less than most analysts expected in the midst of scorching weather and a coal shortage that has raised the demand for gas-generated electricity.
Heating and power-plant inventories of the fuel rose by 37 billion cubic feet last week to 2.42 trillion cubic feet. However, analysts had expected a much bigger gain. Somewhere around the tune of 49 billion cubic feet.
September futures rose 12 cents to $8.471 per thousand cubic feet, up 7.4% for the week. This is the highest closing price since early November 2004.
But readers of Wealth Daily know that all the energy prices are going to continue to rise.
According to the Edison Electric Institute, U.S. electricity generation was 13% higher than last year as of July 30.
And don’t think we’re out of the hurricane fire yet.
The U.S. Weather Service has predicted 11 to 14 more tropical storms, including seven to nine more hurricanes, by the end of November.
Yes this is sincerely the summer of fear.
A true season to remember. Mark my words.
– Luke Burgess