A while ago we saw a recovery in the oil market due to the Keystone pipeline spill, for which a federal investigation has already been launched. However, oil started its downward movement after markets circulated reports indicating that some senators in Congress have come up with a new initiative to increase taxation on 'Big Oil' companies in order to boost budget revenues. In addition to increasing taxation, the senators want to push oil companies to dramatically increase production. Politicians are clearly concerned about pro-inflationary increases in US oil prices. As a result, 'black gold' has come under pressure again and is giving back much of its earlier gains.
OIL.WTI chart, M30 interval. Source: xStation5
At the same time, oil companies continue to gain almost completely ignoring the initiative of politicians. Shares of Chevron (CVX.US), Occidental Petroleum (OXY.US, yellow chart) and Exxon Mobil (XOM.US, purple chart) opened today with an upward gap, with the stocks maintaining bullish momentum.
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