Oil futures may be lower in the short term amid recent projections from OPEC about lower than expected demand for the foreseeable future.
In a recent statement at the conclusion of its latest meeting, OPEC cited the improvements that have been seen in the economy recently, but also cited “serious threats” to oil demand in the foreseeable future.
Some examples cited were the rising public debts in the world’s most advanced economies, as well as what was called “rising protectionism” in some countries and weak demand in general. Typically, oil demand rises and falls with economic activity, as was witnessed last year at the height of the recession.
According to OPEC, world oil demand for crude oil will rise “marginally” in the coming year, but that will be offset by an expected increase in non-OPEC supply. As a result, OPEC indicated that 2010 is likely to be the third consecutive year of lower worldwide demand for its products.
Because of this, OPEC indicated that it would keep its current oil production ceiling unchanged. This indicates that along with anticipating stagnant demand for its products, OPEC remains largely satisfied with the current price range of crude oil.
Learn Futures Technical Analysis with The Market's Spine
Give Your Trading the Backbone it Needs to Succeed, The Market’s Spine is a 34-page futures technical analysis guide that details how to read the backbone of recent market activity, explains a handful of indicators that are well known to institutional and fund traders, and more. Expand your futures technical analysis knowledge here.
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.