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Energy

Oil Rises On Potential Fed Cut And OPEC Intransigence

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By Douglas A. McIntyre Published
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Oil prices are entering a stage where they are almost bound to rise sharply. the price is near $107 again today. OPEC indicated that it would have no meetings on supply until September. Several ministers to the cartel have said that they feel $100 plus oil prices are due to speculation and a poor economic policy in the US. The fact that they are making tens of billion of dollars on the higher prices does not seem to enter into their equation.

China has also approached Nigeria about a $50 billion economic package for the African country. Since China has no equivalent to the Peace Corp, it is likely that the deal is to secure oil rights that might have gone to the pool of countries which includes that US and Europe. Taking some capacity "off line" and funneling it to one country should have the net effect of raising prices.

Bernanke and Company have also signaled that they may cut rates again. If so, traders will assume that the US economy could turn up toward the end of 2008 driving up demand for crude.

The rising in oil prices will be exacerbated by increasing demand in developing countries like India and the most modest increases in refinery capacity.

The hope for easing cost for crude are getting smaller each day.

Douglas A. McIntyre

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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