On Wednesday, June 22nd, the price of oil closed at $95.41. The following day President Obama announced to great fanfare the release of 30 million barrels of crude over the next 30 days from the Strategic Petroleum Reserve (SPR) with an eye on reducing oil’s price.
Mildly sentient minds with a basic sense of oil-price history knew it wouldn’t work, and sure enough, one week later – yesterday – oil closed at $95.25. As of today oil is trending down to $94/barrel, but this can be chalked up to Treasury Secretary Tim Geithner’s looming resignation. As this piece will make abundantly clear, the price of oil is a dollar phenomenon, and with a weak dollar Treasury Secretary getting ready to depart, gold is down $19/ounce in concert with increased dollar strength, thus helping to explain oil’s slight weakness relative to yesterday.
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