Oil prices moved above $60 a barrel earlier in the day, but where unable to maintain their gains and have since dropped below the psychological $60 barrier once again.Earlier this year oil had been making steady gains as investors bet on an economic recovery occurring in the second half of this year, but we are now in the second half of the year and a recovery is nowhere in sight. As a result, traders have started to focus more on the underlying fundamentals for oil, and this has led to a pretty steep sell off over the past couple of weeks.
Today's selling marks the seventh day out of the last eight trading sessions that oil has moved lower. Oil had traded up as high as $60.67 earlier in the session, but has since dropped $0.04 to $59.85 a barrel. It had traded as low as $58.35 before buyers came back in to boost prices back up close to break even on the day.
Now that the speculative trading has been removed from the market, attention is being focused on supplies, and for now there appears to be ample supplies for the market. A recent study showed that oil stockpiles in westernized countries were enough to cover roughly 62 days of demand. This is bearish for oil since it represents a week more than supplies were running at this time last year.
One thing that could bring buyers back into oil are two reports that are due out this week regarding inflation. Since oil is often used as a hedge against inflation, any signs that inflation is on the rise will spark buying interest in oil. On Tuesday we will get a fresh reading of the producer price index, and that will be followed up on Wednesday with the latest consumer price index readings. If these show that inflation is on the rise, do not be surprised to see a nice jump in oil prices. Should they however show that inflation is in check, or even dropping then the recent selling will continue.
To get a better understanding on just how severe the recent selling has been, let's close by taking a look at a current oil chart:
What are your thoughts on oil prices? Should we expect to see things level off in the days to come, or is oil still overpriced and in need of more correction?
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Reader Comments (Page 1 of 1)
7-13-2009 @ 5:21PM
Iridium said...
D'Oh oil ended trading just above $60.
Doesn't matter anything above $15 a barrel right now is just pure speculative fluff.
KILL GOLDMAN SACHS THE DRACULA OF MODERN TIMES
7-13-2009 @ 6:01PM
dang1067 said...
HEADLINE: "Oil remains under $60 on Weak demand"
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Oil-Price is liken to a "LAND-MARK" to where the people of the world are very familiar with, everyone's eyes are locked-in at it as it gets corruptly manipulatedly jacked along with gasoline and diesel price.
This is "THE" commodity that SIGNALS the SIGNIFICANT of confidence of the world when it's value goes down. And when its price goes up it brings NEGATIVITY, FEARS, HOPELESSNESS, BETRAYAL, TAKEN ADVANTAGE OF, BEING LIED TO, and the word "RIPPED-OFF." In turns this NEGATIVE side of corruptly manipulated oil-market dynamics SCARES the entire world from traveling, buying and spending... This is the comodity that give the people of the world the signals of when it is a good time to travel, buy and spend... And when oil-price remains corruptly manipulatedly high, the world takes the SIGNAL as, "It's not a good time to travel, buy or spend." And when people of the world aren't traveling, buying and spending, this hell-hole economy will continues to DIVE deeper into the shiiiit-hole...
And when people of the world has LOST their confidence in traveling, buying and spending... You can kiss the retail industries, the travel and airline industries good-bye!!! And when the retail industries dies, so does the factories, manufacturers and companies that bring their goods to the retail shelves to sell will also follows and dies, because their outlets has been taken away gone belly-up... And when all these companies, factories, manufacturers, airliners, and retailer outlets dies, so does "UNEMPLOYMENT and JOBLESSNESS" follows in gargantuan numbers... And when UNEMPLOYMENT is out of controlled, HIGH CRIMES follows...
Thats the reason to why oil-price needs to take a a back DIP and return to $28 FAST, quickly and A.S.A.P. where it belongs if they want to inject and restore confidence to world and revive this hell-hole economy the RepubliCvnts has brought in the first place...
The longer they keep this corruptly manipulated oil price up there, the longer this shiiiit-hole economy will remain...
If these "DESTRUCTIVE" Wall Street F*CKING scvmbag "PARASITES" of the Earth was able to survive 6-years ago when crude was on the market at $28 bbl, there's should be no reason to why these same exact "DESTRUCTIVE" F*CKING scvmbag Wall Street "PARASITES" can't survive today on $30 a barrel!!
7-13-2009 @ 7:38PM
Tech said...
This country is run by the private FED oil banksters long headed by the Rockefeller elite. Cheney was David Rockefeller's director at his Council on Foreign Relations and Obama's chief foreign policy advisor co-founded David Rockefeller's Trilateral Commision-you're screwed. He is also the head US Bilderburger at thier meetings although both Obama and Hillary attended the last one. Goldman Sachs with JP Morgan Chase are the top financial crime corporations in the USA but operate globally now. They are the top of the FED private banksters and just stole 13 trillion we don't have. Backed Communist China to it's rapid rise and outsourced all our real jobs while breaking unions here and the middle class and America. David is a proud globalist after all. Ooops! Off to Walmart to check out the latest slave made Communist Chinese made goodies! Support America! Buy a Congressman!(They do!)