Oil Heading Higher in 2012
The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
NEW YORK ( TheStreet) -- 2011 has seen oil increase in price almost 15%, making it the third straight year that oil prices have increased. And 15% should be considered a very good result for consumers and business, considering that Brent crude, the benchmark upon which most refined products are based, was pushing upwards towards $130 a barrel earlier this spring.
We won't get as lucky in 2012.
What has been holding down crude for the past two quarters has been a combination of factors: First, negative news from Europe put the deep threat of recession contagion throughout global markets. Second, the lack of transparency into the Chinese markets are making it difficult to predict whether China can engineer a "soft landing" or whether more depressing data that has been emerging is the precursor of a real commodity crash.And third, increasing supplies from Libya and Iraq are coming on line faster than many thought. Combine this with a slowing Europe and a U.S. consumer who is getting slowly better at conservation and you've got weakening prices for oil.
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