Oil prices up again

We have been hearing little about oil prices in recent weeks

Oil at 7-week peak on Middle East tensions, strong gasoline

Oil prices rose on Wednesday, hitting a seven-week peak as violence in Syria and tensions with Iran reinforced geopolitical fears and U.S. Federal Reserve Chairman Ben Bernanke downplayed the risk of a double-dip recession.

Reuters,

22 July, 2012

Crude futures posted their sixth straight gain with lift from U.S. gasoline futures, which notched the biggest percentage gain in the oil futures complex. Gasoline moved above its 200-day moving average, boosted by the government's inventory report showing gasoline stocks fell last week, against expectations for a rise.

"Crude continues to show upside bias after the (second-quarter) sell-off, with the economy slowing seeming to be priced in and geopolitical worries and the gasoline draw down supportive," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.

The Fed does not expect the U.S. economy to lurch back into recession, Bernanke told the House Financial Services Committee in a second day of congressional testimony that helped assuage worries about slowing demand for oil in a sluggish economy.

"At this point we don't see a double dip recession. We see continued moderate growth," Bernanke told the panel.

Brent September crude pushed up $1.16 to settle at $105.16 a barrel, reaching $105.46 in post-settlement trade, highest intraday price since May 30.

U.S. August crude rose 65 cents to settle at $89.87 a barrel, having reached $90.04, also the best intraday since May 30. The August contract expires on Friday.

Total crude trading volumes topped a half million lots for both Brent and U.S. crude, but turnover for both contracts lagged their 30-day averages.

The relative strength index (RSI) for Brent, U.S. crude, gasoline and heating oil futures is above 60. A closely watched technical signal, a reading above 70 indicates an overbought position. The RSI for Brent and U.S. crude spent most of June below 30, a signal of an oversold position.

The S&P 500 index touched its highest level since early May as corporate profits eased fears of collapsing earnings. 

U.S. housing starts rose 6.9 percent in June, though new permits fell 3.7 percent, with the jump in groundbreaking on new homes adding to the more hopeful tone for crude oil prices, analysts and traders said.

SYRIA AND IRAN

Syria's defense minister and President Bashar al-Assad's brother-in-law and a top general were killed in suicide bomb attack carried out by a bodyguard on Wednesday, bringing the battle to the heart of Assad's government that has been dealing with a 16-month-old rebellion.

An explosion killed at least four Israeli tourists on a bus outside a Bulgarian airport and Israel blamed Iran, promising a strong response.

Highlighting tensions with Iran, U.S. Defense Secretary Leon Panetta said the United States will hold Tehran directly responsible for any attempt to disrupt shipping in the Gulf region and will be able to defeat any Iranian attempt to shut down seaborne commerce.

Oil has gained more than 17 percent since the low it touched last month, largely because of reinforced worries about potential conflict between Iran and some Western nations over Tehran's disputed nuclear program.