We have seen a steady increase in the energy complex over the past five weeks.
Seems to be a bit counter intuitive with the steady news stream of continuing economic deterioration.
One of the major factors is the decreasing crude supply from record levels at Cushing, OK.
This has helped WTI to trade at a premium to Brent. “A lot of what we are seeing is a return to normality,” said Tim Evans, an energy analyst with Citi Futures Perspective in New York. “WTI needs to trade at a premium to Brent to attract the imports that we need.”
This week OPEC takes center stage as they are expected to announce potential further cutbacks in crude production. Near month crude futures will have the opportunity to test $50 resistance levels should the cuts surpass market expectations. Range traders will be looking to short at $50, hoping to ride the likely sell off back down to $40.
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