US economy heals as oil investment recovers

Brent crude oil futures held their ground, hovering around the $119 per barrel mark on the global  commodity index today, as optimistic financial reports out of the US pared down the damage that news of oversupplies wreaked on the sector. Traders speculated that the US’ faster than expected recovery out of recent economic hardships signified a peak oil investment period on the charts.

The US Federal Reserve issued a report earlier today stating that it would keep interest rates near zero for the next two years in order to speed up the economic recovery of the nation. The US is the largest crude oil consumer in the world, and its steady resurfacing from the midst of a recession in 2008 has been a great boost for crude oil futures and oil investment in general.

Brent crude oil futures lost a meager 2 cents on the ICE Futures Exchange in London, settling at $119.10 per barrel in intraday trading. The European benchmark commodity rose 55 cents during yesterday’s session.

West Texas Intermediate crude oil prices for June delivery gained 11 cents for the day, currently sitting at $104.24 per barrel on the NYMEX market. The American benchmark saw a 57 cent increase yesterday.

Investments in crude were further bolstered once Asian shares jumped at the Fed’s announcement.

Iran’s controversial nuclear program and the ensuing embargoes from the powers of the West have been a great line of support for crude oil prices over the past year; however, the prolific OPEC nation has now entered talks with Russia in order to bring a peaceful solution to the crisis and re-launch its exporting efforts.

While the resolution would be fortunate on a geo-political level, Iran’s return to the sector will likely hinder the tremendous rallies that crude oil futures have been posting over the past few months.

By: Chris Termeer

Chris Termeer

Chris Termeer is an oil and gas consultant, industry commentator and analyst. His book, Fundamentals of Investing in Oil and Gas provides a comprehensive overview of all aspects of the oil and gas industry, including exploration, drilling, production, storage, transportation and refining, to name but a few.

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