Powered by Blogger.

We Have Move To...

2009-07-25

Crude Oil Price May Have Been Speculated

Crude oil price may have been speculated base on a report from US the WTI crude oil historical ATM implied volatility has fallen from a peak at 109% in December 2008, to 47% this week. It may hover around these levels in the short to medium-term as the summer lull continues. With lower volatility the incentive to raise production levels have risen. This could maintain pressure on crude oil prices given the still weak macroeconomic fundamentals.

Oil Refinery Explosion | Oil Pump Jack | Big Spring Texas

With lower crude oil volatility, producers’ total marginal cost of producing the extra barrel of oil could decrease. Marginal cost is composed of direct marginal cost and an opportunity cost of producing now rather then later. With lower volatility it is believe the opportunity cost also decline. But apart from lower volatility, a continued drawdown of crude oil inventory in the US might add to the incentive to produce more crude oil. US gulf coast crack spread has risen from $3.142/bbl on July 13th to $6.785/bbl yesterday,creating further incentive for increased refinery production. This should result in a drawdown of crude oil inventories. Over the past few weeks we have seen a shift from a buildup in crude oil inventory in the US to a build-up in refined product inventory.

http://www.arabianbusiness.com/images/magazines/arabianbusiness.com/web/Oil-barrels33_thumb.jpg

However, even the decline in crude oil inventory is not an indication of a rise in demand. US refined product demand remains weak and inventories high. As a result we still see the upside of crude oil prices limited above USD69/bbl, so need to understand here is crude oil inventory low may because it keep in the refinery but most of the report only written on crude oil inventory is low to speculated the oil price.

Be careful when you what to invest in oil base service company in Bursa Malaysia because oil price may drop when all the refinery is in high inventories.

Related Articles:-
  1. Crude Oil Price Is Getting Stronger

0 comments:

Related Posts Plugin for WordPress, Blogger...

PostRank

My Blog List

Blog I Follow

Popular posts

Blog Archive

Templates

Stock Quote

Stock Quotes
KLCI Live Quotes
Lookup Stock Code/Name
Enter Stock Code/Name
FastQuote

Powered by zoomFinanceCorp.

Subscribe Now: Feed Icon

Home Page Home Page Home Page Home Page Home Page Home Page

Investment Idea

My investment with RM5,000 initial capital have been growing since 2005.I found the stock market appears confusing and complicated, but it is most definitely based on logic "supply and demand". However, the laws of supply and demand as observed in the markets do not behave as one would expect. To be an effective trader, there is a great need to understand how supply and demand can be interpreted under different market conditions and how to take advantage of this Off Market Transactions in KLSE.

Malaysia Gold Price

Gold Price Per Gram in Ringgits
Malaysian Ringgits per Gram

  © Free Blogger Templates 'Greenery' by Ourblogtemplates.com 2008

Back to TOP