Crude oil pricescould break above USD70 in a broader rally in the equity markets.
Crude oil prices barreled above USD65 last week and jumped above USD68 on Friday 24 July. With a weaker dollar expected this week, prices are likely to remain above USD65 and could break above USD70 in a broader rally in the equity markets.
Oil continues to trade on expectations of a global economic recovery rather than the current fundamentals. Oil inventories in the United States have declined by nearly 19 million barrels since early June but are still at elevated levels according to U.S. Energy Department data. On the downside, ongoing discussions by U.S. regulators about limiting on commercial interests in the commodity markets, including oil, have the potential to precipitate a widespread investor panic about such pending regulatory action, which could cause a sharp price decline. If investors preemptively curtail their positions, oil price could begin to reflect the weak near-term fundamentals.
This probably will not happen in the near term. Meanwhile investors remain interested in oil, keeping prices firm.
Oil continues to trade on expectations of a global economic recovery rather than the current fundamentals. Oil inventories in the United States have declined by nearly 19 million barrels since early June but are still at elevated levels according to U.S. Energy Department data. On the downside, ongoing discussions by U.S. regulators about limiting on commercial interests in the commodity markets, including oil, have the potential to precipitate a widespread investor panic about such pending regulatory action, which could cause a sharp price decline. If investors preemptively curtail their positions, oil price could begin to reflect the weak near-term fundamentals.
This probably will not happen in the near term. Meanwhile investors remain interested in oil, keeping prices firm.
1 comments:
I notice that crude oil price affect world economy or oil dependent sectors when the price hit USD100. In fact last year financial crisis(September 2008) was actually became acute due to oil price. I could be wrong but i strongly believe that boom and bust of world economy will be dependent on crude oil price. Imagine if crude oil hit USD200! We live in new era now where oil is depleting and governments trying to hide the truth. Theres not replacement for fossil fuel yet, dont mention about nuclear or so called renewable sources(too expensive). But i think the next 25 years, our live will be much different on which how we us energy and how energy is created and stored.
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