Crude Oil Finding Low Support above $70
June 26th, 2009 Posted in Daily Forex News
After a rough start to the week, when Oil prices dropped below $67 a barrel, prices have steadily been recovering throughout the week, reaching back above $71 a barrel. However, the fundamentals supporting the rally appear to be weak as Oil has been trading mostly below $70 a barrel during Friday’s trading hours.
The initial drop in prices came after a report by the World Bank that stated the world economy is expected to contract by 2.9% in 2009, worse than previously expected. However, a weakening dollar combined with some renewed optimism regarding economic expectations, assisted by a stronger than expected forecast for growth by the Organization for Economic Cooperation and Development (OECD), has helped support oil prices. Crude Oil received further assistance by the current political unrest in Nigeria that may threaten Oil supplies. Rising equity markets combined with recent data showing a drop in crude stockpiles have also helped push prices up.
However, it is unlikely that Oil prices will move above $72 in the short-term as demand continues to be weak and supply is still growing. The overall fundamentals are not good and there is little justification for Oil prices above $70.
Start trading with Natalie R. now:
Tags: black gold, commodity trading, Crude Oil, Crude Oil forecast, Crude Oil trading, forex and oil, forex blog, Forex Forecast, Forex Strategies, oil trading
