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No slaying of oil bull yet

The crude-oil bull will not be brought down easily. The price of a barrel is edging up today despite Saudi Arabias pledge yesterday to raise production, reports the Associated Press. And this comes on top of news last week of a 17% increase in Chinas subsidized gasoline prices and a clamp down on trading excesses in U.S. futures markets.
Current events supporting oil include the threat of a strike on Iran by Israel and turmoil in Nigeria. And with the U.S. driving season entering its peak period, prospects for a correction certainly do not appear to be in store just yet.
But after August, Chinese authorities should let domestic prices rise closer to world levels, adding to demand destruction occurring elsewhere in the world. Chinese authorities ought to take such measures now but don’t want to risk having social unrest mar the hosting of the summer Olympics. Tougher measures will have to wait until after.