Brent futures, also represented by the exchange-traded fund United States Oil (USO), jumped above $115 in June as geopolitical conflict in both Ukraine and Iraq led speculators to worry about supply disruptions.
USO data by YCharts This could be the case in 2014. The underlying global economy remains in a gradual recovery, with central banks across the world continuing to enact simulative policy. International Monetary Fund Managing Director Christine Lagarde signaled on Sunday that her institution may cut its global growth forecasts for this year as investment is still weak and risks remain in the United States economy. "The global economy is gathering speed, though the pace may be a bit less than we previously predicted because the growth potential is lower and investment" Lagarde told the Cercle des Economistes conference in Aix-en-Provence, France. A robust global economy would increase demand for oil, and thus lead to a sustainable increase in prices. Speculative supply disruptions, however, lead to volatility in oil prices, which means prices may fall to new lows as quickly as they spike above $115. At the time of publication the author had no position in any of the stocks mentioned. Follow @macroinsights This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV