Filed under: Major movement, International markets, Products and services, Consumer experience, Middle East, Economic data, Commodities, Oil
Oil prices are moving to the upside again this day, adding to yesterday’s strong gains to trade up as high as $105.97 a barrel.
On Wednesday, oil prices surged on two basic factors. The first being a decline in U.S. inventories (the first in eight weeks), and the second being OPEC’s decision not to adjust its production quotas. While the inventory report may have come as a surprise to some, the OPEC decision was mostly expected, as the oil cartel had been hinting all along that it wasn’t in favor of lifting its output.
The primary reason though why traders are pushing prices higher is Wednesday’s inventory report. Analysts had been expecting to see an increase for the eighth-straight week, but instead were served up data that showed crude supplies dropping by 3.1 million barrels.
Also adding support to high oil prices is the ever declining U.S. dollar, which just can’t seem to turn itself around. The dollar once again dropped to a new all time low versus the euro (surpassing yesterday’s record) and pushed the euro as high as $1.5329.
How much higher oil can continue to go remains to be seen, but for now at least, all signals are pointing to prices remaining above the psychological $100 price barrier for some time to come.
Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor’s Observer.
Entries (RSS)