We said it would be a tug of war. Last week was exactly that as Brent Crude bounced between $112 and $107 and $113 to finish the week at $112. Obama is unlikely to be happy as Gasoline prices rose. I had forgotten that it was the end of Q3: http://uk.reuters.com/article/2012/09/28/markets-oil-idUKL4E8KS24O20120928
With that date passed it will be fascinating to see who or what wins the next battle. The fundamental indicators show that demand simply does not back up the price. However, the fear factor of geopolitics – mainly Iran based – and the issue of economic woes in both the Eurozone and potentially the slowing down of the big emerging economies all result in “support” for increased prices. These increases are of course simply based on speculation and an opportunity for those that trade our most critical raw material to make their profits.
So where next? It is now or never for Obama. Surely now is his moment to put pressure on the price to drop, whatever it takes to therefore bring US Gasoline prices down! Whether it is Saudi, the IEA, or any of the techniques at his disposal something will give. Brent Crude to head back towards $100 for a US election!