Oil Extends Gains from Speculation on Obama's Rescue Plan
Posted on 22. Jan, 2009 by admin in Crude Oil
The price of Crude Oil jumped to above $43 a barrel on Wednesday as the Organization of the Petroleum Exporting Countries’ (OPEC’s) supply cuts outweighed additional evidence that a deepening global slowdown is crushing demand for fuel. In fact, the cartel has actually been enforcing its deepest oil supply cut, which should be enough to boost the price of Crude.
Wednesday’s gains in Crude Oil were tempered by mounting worries about shrinking oil demand as an economic slowdown takes hold, analysts have said. Oil has also extended its gains after U.S. equities surged on speculation a bank-rescue plan from President Barack Obama will boost financial companies. The prices rallied on the new U.S. president’s plans to complete an assistance program that can be paired with the $825 billion stimulus package. And since there’s been a positive correlation between energy and equities, this appears to be giving the oil market some support.
