Say goodbye to the Euro and hello to the Japanese yen. China may be raising reserve requirements to slow demand but today it is strong economic data out of Japan that seems to be giving oil a bit of a lift. Last week oil shuttered when China increased reserves on banks for a second time in a month. Yet that seems to be a bit of a distant memory this morning after strong data out of Japan.
Bloomberg news reported that crude oil rose after gains in Asian equities and growth in Japan’s economy increased confidence that a global economic recovery will lead to higher fuel demand. Better than expected demand expectations for oil came from the fact that Japan, the world’s third-biggest oil consuming country, yesterday reported 4.6 percent growth in gross domestic product for the three months ended Dec. 31, surpassing the 3.5 percent median estimate of economists surveyed by Bloomberg.
This strong data saved oil from its bearish fate as the carry traders may look to the yen as an alternative currency to play with. The situation in Europe is looking even more uncertain as the debt problems surrounding Portugal, Ireland, Italy and Greece and that makes the yen a more attractive alternative.
Oil has a lot to prove with seasonal demand peaking as we enter the long slow march out of winter. The Energy Information Agency reported that the U.S. average price for regular gasoline fell for the fourth week in a row, dropping less than a penny to reach $2.65 per gallon, which was still $0.73 above last year. On the East Coast the price decreased almost two cents to $2.67 per gallon.
The Midwest average increased by over a penny to $2.57 per gallon, and Rocky Mountain prices rose by less than half a cent to $2.62 per gallon. Gulf Coast average prices fell almost 3 cents to $2.52 per gallon and remained the lowest regional prices in the Nation. The West Coast average dropped close to 2 cents to $2.90 per gallon and the price in California decreased over a penny to $2.96 per gallon.....Read the entire article.
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