After hitting yet another record closing high in regular trading, crude oil moved to above the $81 level this evening.
What's behind the move? The modest OPEC output increase is seen as a primary driver in concert with ongoing strong demand worldwide. 500k barrels per day extra from the OPECers just doesn't cut especially in light of disappointing output from the non-OPECer nations. And let's face it, new refineries going up any time soon in this country? That's a situation that won't resolve for a decade or more. No wonder the crude forward curve reverted back to a backwardation condition. COT open interest was up for third straight week as well. The run is amazing, and as mentioned last week, there's a good chance we could see a range up to about $85 near term if the momentum continues. Technical charts show crude is looking overbought, so a short, but sharp correction lurks around some future corner. For now, though, the market continues to bid crude ever higher.
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