Wednesday, October 13, 2010

Crude Oil Rises a Second Day on Forecasts of Increased Demand and Dollar's Decline

Oil climbed for a second day in New York after an industry-funded report showed U.S. crude supplies fell and the dollar declined against the euro, increasing the appeal of commodities as an alternative investment. Futures rose as the U.S. currency slipped on speculation the Federal Reserve will ease monetary policy further and after the American Petroleum Institute reported that inventories decreased the most since July. Prices surged 1.6 percent yesterday, the most in six days, after the International Energy Agency raised its global demand forecast and as China imported a record volume of the commodity in September.

“The overall feeling is optimistic,” said Jonathan Barratt, managing director of Commodity Broking Services Pty in Sydney. “We still see stimulus being talked about from the Fed, and as a result of that we’re seeing all the commodities climb. It all looks solid for oil to move higher.” The November contract jumped as much as 79 cents, or 1 percent, to $83.80 a barrel in electronic trading on the New York Mercantile Exchange and was at $83.73 at 1:00 p.m. Sydney time. Yesterday, it added $1.34 to $83.01, the highest level since Oct. 6. Prices are up 5.5 percent this year.

Crude stockpiles dropped 4.01 million barrels last week to 362.1 million, the American Petroleum Institute said. A U.S. Energy Department report today may show stockpiles climbed 1.45 million barrels last week, according to the median of 18 analyst estimates in a Bloomberg survey......Read the entire article.

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