After Days Of Sharp Fall In International Oil Prices Return To Fundamentals – The International Oil

Category : Day Trading

Recently suffered a setback in international oil prices, as of two trading days, 5 total tumbled 7.2%, New York main oil futures contract fell below 80 U.S. dollars a barrel mark. Industry analysts generally believe that the spread of European sovereign debt crisis and the realities of energy demand is still weak oil market investors that the economic recovery of the "warm" temperature, started to re-examine the supply and demand fundamentals.

4 between the end of early May, investors have driven the economic recovery of oil consumption, then optimism has been the promotion of international oil prices rose for four straight days, the cumulative increase of 4.5%, New York crude oil futures shot up 87 per barrel .15 U.S., setting the highest since October 2008 contract month trading price.

However, the Greek sovereign debt crisis worsening and may spread to other euro zone countries to the global financial markets has poured cold water poured. German central bank governors and finance ministers of Finland and other EU countries, officials have recently expressed concern about the debt problem will spread to Spain, Portugal and other euro zone countries. Renowned international rating agencies Moody's rating of 5 to all the Portuguese banks included in the list of possible downgrades, and warned that Portugal's sovereign credit rating may be lowered, saying "the current market situation is very unfavorable, and the Portuguese Government has been the rising cost of financing." Previously, the rating agency Standard & Poor's sovereign credit rating has been lowered to the Greek "junk" grade, and the gradual reduction in the Spain and Portugal's sovereign credit rating.

Debt crisis in Europe a serious blow to the market's confidence in the global economic recovery, 4 Pudie global stock markets, the New York stock market hit a 3 months to the largest one-day drop; investor risk aversion unprecedented measure of panic in the Chicago market Options Exchange Volatility Index surged more than 20%, the highest since October 2008 the largest single-day gain. Citigroup futures analyst Tim

Evans said that the risk appetite of investors supporting the crude oil market, the strong early, but now investors "are the risks to strangle the throat."

In addition, the debt crisis in Europe caused the euro against the U.S. dollar continuously refresh the year low, and for a time under 1 euro 1.2804 U.S. dollars touch the nearly 14-month lows, making dollar-denominated oil futures "worse."

U.S. Energy Security Analysis, Managing Director, Sarah? Emerson said, as long as the euro continued to decline due to the debt crisis in Europe, oil prices will face downward pressure.

Addition to sovereign debt problem, a continuous increase in U.S. crude inventories also undermined investor confidence in the future energy demand. 5, according to U.S. Department of Energy data released last week, U.S. crude oil inventories increased by 280 million barrels, higher than the average market forecast of 154 million barrels a day increase is almost double; the same period increased by 120 million barrels of gasoline inventories, including heating oil, diesel Distillate inventories, including an increase of 60 million barrels, an increase of greater than market expectations.

Major U.S. oil inventories in the past 13 weeks to 14 weeks in the uplink. Of particular note, the U.S. temperatures warming, peak summer gasoline season is approaching, but the total gasoline inventories are still at the highest level since 1989.

Senior oil market analyst and vice president of American Financial Group, Phil Bailey? Flynn said, after oil prices based on investor demand for oil will rebound with the economy based on growth, "but now the concern of the market the focus will return to fundamentals and excess supply of crude oil on. "

Future trend for oil prices, leading U.S. oil analyst, energy trading advisory firm Ritterbusch, president of Jim? Ritterbusch 5 in a letter to clients, estimated that "if the debt crisis of uncertainty in Europe continue the market pressure, short-term oil prices may be below the depth of 80 U.S. dollars a callback. "

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