US crude oil prices average above $60 for past six weeks

Even while demand is reduced

Wendy Natt, Jul 06, 09.

From below $40 per barrel in December 2008 to nearly $70 per barrel in June 2009, the spot crude oil price for Texas Light Sweet has clearly been on the rise, but apparently more recent increases in oil prices are due to factors other than market forces, according to a Houston Economic Indicators email update last week from the Greater Houston Partnership:

The Friday closing spot market price for West Texas Intermediate—the U.S. benchmark light, sweet crude oil—averaged $69.83 per barrel in June, 49 percent below the June ’08 average, according to data published today by the Energy Information Administration (EIA). This is the highest monthly average since $74.94 last October, and is a marked improvement from $39.51 in December. Last week was the sixth straight above $60, and June trading was in a very narrow range.

EIA has said that market fundamentals don’t justify prices this high, citing ample supply and reduced demand, and it attributes prices as high as they’ve been recently to speculation and—since oil is dollar-denominated—hedging against a weakening dollar. Civil unrest in the Niger Delta over the past few weeks is also a likely contributing factor.

See the full list of Houston Economic Indicators for July 6, 2009 published by the Greater Houston Partnership.

Also, the July 2009 issue of GHP’s monthly economic report Economy at a Glance is now ready. The publication summarizes and visually presents Houston’s current economic trends, and data from preceding years.