Oil Prices Rise, Again, Now $107 a Barrel

Jul 11, 2013 7:57am

Morning Business Memo:

Oil prices continue to rise, prompting fears of higher gas prices. West Texas crude futures rose to nearly $107 this morning after a sharp weekly drop in U.S. crude inventories underlined rising demand. Tensions over Egypt are also behind the recent price increase.

After falling for months, gasoline prices are also increasing. But some oil traders blame speculation for at least some of the recent price hike, saying inventories are still higher than normal. They also point to the surge in U.S. oil production and signs of slower growth in China as reasons that crude prices should be lower than they are today.

Target is finding a new way to target students heading back to college. As part of its annual marketing blitz, the big retailer has launched a campaign that “lets online shoppers interact with YouTube personalities who are spending four days in dorm rooms filled with Target merchandise,” USA Today reported. Target and other big retailers have been looking at new ways to use social media to promote its marketing campaigns. The back-to-school season is the second busiest time of year for many retailers.

Global stock averages are rallying today, and Ben Bernanke is the reason. His dovish comments about Fed policy on the money supply are being seen as a sign that low interest rates will continue for a while longer. Bernanke says the U.S. economy still needs help from low interest rates.

“You can only conclude that highly accommodative monetary policy for the foreseeable future is what’s needed in the U.S. economy,” he told a National Bureau of Economic Research conference. That’s because unemployment remains high and inflation is still below the Central Bank’s target. Minutes released by the Fed show that policymakers are increasingly divided about the $85 billion a month bond-buying stimulus. Some Fed officials want to end the program by the end of the year.

There are more signs the housing market is shaking off its hangover from the bust of five years ago. Fewer homes entered the foreclosure process last month. Foreclosure listing firm RealtyTrac says the level was the lowest level for any month in 7 1/2 years and down sharply from May and June last year. In some states – including Florida, Nevada, Illinois and Georgia – the foreclosure problem is still a potential drag on home prices.

A group of 17 American retailers and clothing makers has agreed on a five-year safety pack aimed at improving conditions at factories in Bangladesh. As part of the deal, U.S. companies such as Walmart, Gap and Target have provided a total of $42 million so far in funding and will offer an additional $100 million in loans to help factories improve safety at clothing factories. The agreement is separate from a legally binding plan agreed to by 70 firms, including some of Europe’s top retailers. The safety plans were worked out in response to the April collapse of a factory near Dhaka, Bangladesh, where more than 1,100 workers died.

Richard Davies Business Correspondent ABC News Radio abcnews.com Twitter: daviesabc 212-456-5100

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