QE3 Could Make a Big Difference in Your Diesel Fuel Price

The best way that I can put this simply is that several countries economies stink right now but oil market traders believe that the Federal Reserve will announce stimulus and this will make your diesel fuel prices higher. Ok, maybe to simple but it is fact. As the U.S. economy goes so does the world economy by in large. Our economy has not been very good for years though we are in better shape than a few years ago, we are still not doing great.

The Federal Reserve for QE1 and QE2 believed that it helped the U.S. economy grow. I don’t know the numbers and if the U.S. spends more money for the economy to grow then it really grew or not. The issue is our economy needs a kick in the pants to get going and hopefully QE3 does it. When our economy goes it kicks the whole world economy into another gear.

Where crude oil prices come into play and mostly diesel fuel prices is that with economies growing there will be more demand for oil. Since as you will see in the article below, most of the world runs on diesel fuel and this will just drive diesel fuel prices higher.

Right now the oil market is already over sold. Poor economic data, high supply and still high diesel fuel prices leads to some of these comments below:

• Benchmark oil prices will likely gain this week after poor U.S. jobs numbers increased the likelihood of the Federal Reserve announcing additional stimulus at their policy-setting meeting this week. Weekend data which showed China’s factories running at their weakest pace in 39 months are also positive for crude prices as they raise the possibility of further monetary easing by Beijing.
• “The market is clearly betting on a third round of quantitative easing from the United States,” said Tamas Varga, analyst at brokers PvM Oil Associates in London. “The Chinese data were pretty bearish as were U.S. jobs figures last week. But it is a twisted logic: bad news can be good news if it leads to a positive policy response. That is what is pushing up prices now,” Varga said.
• China’s demand for crude oil is an important gauge of the health of the world’s second-largest economy and of global demand for the commodity. The decline in crude-oil imports came as growth in the nation’s value-added industrial output fell to its slowest pace in more than three years, sapping downstream demand for oil products.

Then of course we have Saudi Oil Minister Ali al-Naimi said on Monday the Kingdom was concerned about rising oil prices but the current high prices were “simply not supported by market fundamentals”. “Saudi Arabia will, as always, take all necessary steps to ensure the market is well supplied and to help moderate prices — and we will meet any additional demand from our customers,” Naimi said.

His county is making tons of money off of higher oil prices. They could be making even more if they didn’t increase how much oil they were supplying the world since the sanctions against Iran have been put in place. Yet, he is smart enough to understand that the world’s biggest user of oil is the Unites States and if we have oil prices to high, it will drag our economy. As well as the world economy and nobody wants that! Learn how we Sokolis has helped other companies. Click here.