Oil Prices Rise By $2, Egyptian Unrest Partially To Blame
Oil prices are volatile as always. The situation in Egypt isn’t making things easier as the violence in the country is causing the price to go up.
Reuters reports that oil prices jumped by $2 on Friday – the biggest weekly gain in a year. One of the big reasons for the price increase has been the recent unrest in Egypt as a result of President Mohamed Morsi being ousted by the military after weeks of protest. Following the successful takeover by the military, pro-Morsi forces have been clashing with the protesters in bouts of violence.
The violence in Egypt has spurred oil investors to start speculating that the price of oil would increase. This is usually due to fears that the unrest will disrupt the distribution of oil in the region. As of now, however, there’s been no disruptions as the ports in the Suez Canal are operating as normal.
Of course, it’s not only the unrest in Egypt that has the price of oil going up. Investors are also looking at the U.S. economy and its slow recovery. The big news was that 195,000 jobs were added to the economy in June. The better than expected news spurred investors to see good things on the horizon.
Even with the good news, there is still room for caution though. The dollar is rising alongside rumors of the Federal Reserve pulling back its stimulus support later this year. Those two scenarios could be bad for oil investors, and prices, but they’re staying cautiously optimistic on the news of a healing economy.
After all of this, Americans will be mostly concerned with one question – will gas prices go up? Well, the price of oil is intrinsically tied to the price of gasoline, but maybe we could see a fluke this year? Maybe we’ll see some relief at the pump? Unfortunately, that’s not the case as we were already seeing back in early June that the price of gas was going to increase again this summer.