Crude Oil Shows Signs of a Comeback
Posted on 12. Dec, 2008 by admin in Crude Oil, Forex News
Crude Oil saw a substantial appreciation in the price yesterday with gains greater than 3%. The jump in Crude was supported by increasing expectations that OPEC will reach an agreement to reduce Oil production the following week. Crude Oil rose more then $ 3.00 a barrel, trading above $ 47.00. Oil also found support from a depreciating USD and a surge in U.S. unemployment claims.
OPEC has widely marketed their intention to reduce output quotas of roughly 1.5 million barrels in an attempt to stabilize the price of Oil. However some analysts are signaling that OPEC’s goals are to stabilize the market and prevent any further downward spiral rather then igniting a rally.
Conflicting reports may be seizing markets as well. Reports released yesterday by the International Energy Agency and the U.S. Energy Information Administration have different views concerning the demand for Crude next year. The IEA announce that Oil demand is expected to contract by the end of this year and that in 2009, the demand will rise again to a downward-adjusted 86.3 million barrels a day.
On the other hand, the U.S. Energy Information Administration predicts that global Oil consumption is expected to decrease by 50,000 barrels a day in 2008 and the decline will continue by 450,000 barrels a day in 2009. This would be the first time in three decades that world consumption would decrease in two consecutive years.
