For the last few months, I’ve been plugging the theme of higher commodity prices. Only a few weeks ago, oil was close to $40 a barrel. Today it’s closing in on $73 a barrel.
The news today is that the International Energy Agency raised its demand estimate for this year. The IEA sees demand falling this year but not as much as its previously thought.
“It’s the IEA’s first estimate increase since August 2008, adding to signs that the decline in demand may have already bottomed.
“The IEA report said worldwide crude demand is expected to fall in 2009 by 2.47 million barrels per day, to 83.3 million. The agency’s previous forecast was for a demand decline of 2.56 million barrels per day, the steepest drop since 1981, according to Reuters.
“The agency warned its upwardly-revised estimate does not “necessarily imply the beginnings of a global economic recovery, and may only signal the bottoming out of the recession.”
This is good news for some of my favorite oil stocks like Southwestern Energy (SWN). Shares of SWN are up close to 80% from their 2009 low.