Why Crude Oil Is Affected By American Job Losses
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There was a shock increase in the amount of jobs lost in December 2009 in the United States. This has led to fears that the American economy will not be recovering as quickly as was expected and that the demand for oil will not be as high as thought. Crude oil fell by almost one percent when 85000 jobs were lost last month. But with the continued plummeting temperatures, futures rose to the highest level for fourteen months and crude oil reserves also rose.
The expected recovery of the United States economy is now not looking as positive as before with the release of these figures. It is now thought that payroll figures will improve at a much slower rate. Because of this, the crude oil reserves have increased with the dip in consumer confidence. Crude oil barrels in the inventories rose by 1.33 million as did gasoline barrels which was up by 3.74 million.
There is some speculation though that the inventories will rise again next week and this may result in a fall in crude oil. If the supplies of crude oil increase, then it is highly possible that the prices of crude oil will begin to go down. Crude oil prices normally rise sharply when supplies are limited so when the supplies begin to rise, the norm is that prices will fall. But we will just have to wait and see. The only thing that we can be sure of is that there has definitely been a spoke in the works regarding the speed with which we can expect the American economy to recover especially with the news of those job losses in December.
Hopefully, the American economy can start to get back on track sooner rather than later which may kick start an upsurge in the rest of the global economy. Before we see any improvement we will have to look out for signs of an increase in demand for oil.
Some people spend a lot of money heating their homes in the winter. Fuel such as electricity and gas show no signs of coming down in price. Many individuals are now changing over to cheaper home heating oil though. After the changeover they have to make sure that the storage tanks are always full of cheapest heating oil to ensure they never run out.
