Rachel Ziemba, director of emerging markets at Roubini Global Economics, gives the three things that are moving oil.
Though oil is up today on US economic news after a rough three weeks, it may be headed back down soon. So says an economist at Roubini Global Economics
So far, it’s been an interesting week for black gold. Monday saw Saudi Prince Alwaleed bin Talal – nephew of King Abdullah – tweet an open letter to his country’s oil minister. The letter says growing American shale oil and gas supplies mean the kingdom needs to diversify its own economy away from one single export. (Twitter is entirely appropriate a medium for the billionaire prince as his $300 million investment bought him 3% of the company in 2011).
On Wednesday, the United States released data showing its Gross Domestic Product was significantly stronger than expected. At 1.7% for the second-quarter of 2013, reported GDP growth blew away the 1.0% economists were expecting. Meanwhile, the Federal Reserve Bank let the world know it was continuing its policy of buying $85 billion per month in US Treasury and mortgage-backed bonds in an effort to stimulate the economy.
With the US economy growing while its central bank is printing more dollars, oil should be moving higher for the foreseeable future, right?
Not so fast. Though priced in US dollars, the oil markets aren’t just about the US. After all, Americans only consumes about one-fifth of the planet’s oil. There’s a whole world out there and they have their own issues. Lots of them.
Rachel Ziemba, director of emerging markets at Roubini Global Economics, says there are three major factors that will have an effect on oil prices.
To hear where Ziemba believes oil is headed and the three reasons why, watch the video above.