The West Texas Intermediate crude price shows every sign of having bottomed, so could be

considered as offering good buying up to $50, which could be considered a resistance (sell) point in the short-medium term. The slow down in the global economy has placed oil under pressure, and you can expect OPEC to drag the change with respect to any steps to reduce demand. It is for this reason you can expect oil prices to be oversold. OPEC cuts in production will eventually catch up, and you can expect a rebalancing of supply and demand. Don't expect oil prices to fall back to $9/barrel, as we are in very different times. The factors pertinent to today are:
1. Improved policy under Obama
2. Global weakness matched by cuts in OPEN supply
3. Rising inflation
There will likely be consolidation in oil prices in a lower range between $40-50/bbl, and I would expect some good trading opportunities in this range.
------------------------------------
Andrew Sheldon www.sheldonthinks.com
No comments:
Post a Comment