SubscribeDaily Futures Commentary COMMODITIES March 20, 2009
Friday, March 20, 2009
ENERGIES
May Crude Oil could trade lower today because of the weaker Euro. This week it appears that crude oil has regained its lock-step relationship with the Euro.
Despite the possibility of a lower close today, crude oil is expected to close up for the fifth straight week. Some traders have been buying crude oil this week as an inflationary hedge. Others are buying on the thought that the Fed’s move to pump money into the economy will lead to an end to the current economic slump and lead to an increase in demand.
A close under $50 will be a sign that more work has to be made on the downside. It will also serve as notice that without a pick-up in demand crude oil is not worth $50 a barrel. Despite aggressive production cutting by OPEC, they have not been able to match the decline in consumer demand.
This market is still sensitive to outside influences. This means a rally in the Dollar or a break in the equity markets could send crude oil sharply lower today.
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