A possible short term low in crude
It has been an exciting year in the oil markets, and there have been some volatile sessions recently suggesting a short term low. Most of the press has focused on the path of various storms (Gustav is ready to hit the Gulf of Mexico as we write), trouble in Ossetia, and the state of the US driving season, but there are more important factors at play. First there was the unwinding of all the short positions that were taken after the speculative blow off which saw crude up to almost $150, and second, the dollar has been strong across the board for the last few weeks. There is also the question of the supply/ demand balance in China, which still looks robust, and finally OPEC have been stubbornly quiet aswell recently.
All in all, the decline now looks over, and at the end of last week there was a big surge of buying which broke the immediate trading range. A retest of the lows of $112 looks to have been successful, and if it can hold here around $120, then crude is going up and the first stop should be $129. Only acceptance below $110 would reassert the recent bear trend, so CFD players can use a variety of monthly US and UK contracts, or of course turn to longstanding favourites Cairn Energy or Tullow Oil.
Blue Index :|
It has been an exciting year in the oil markets, and there have been some volatile sessions recently suggesting a short term low. Most of the press has focused on the path of various storms (Gustav is ready to hit the Gulf of Mexico as we write), trouble in Ossetia, and the state of the US driving season, but there are more important factors at play. First there was the unwinding of all the short positions that were taken after the speculative blow off which saw crude up to almost $150, and second, the dollar has been strong across the board for the last few weeks. There is also the question of the supply/ demand balance in China, which still looks robust, and finally OPEC have been stubbornly quiet aswell recently.
All in all, the decline now looks over, and at the end of last week there was a big surge of buying which broke the immediate trading range. A retest of the lows of $112 looks to have been successful, and if it can hold here around $120, then crude is going up and the first stop should be $129. Only acceptance below $110 would reassert the recent bear trend, so CFD players can use a variety of monthly US and UK contracts, or of course turn to longstanding favourites Cairn Energy or Tullow Oil.
Blue Index :|
