Disappointing data on employment and manufacturing, predictions from the IEA that oil consumption will fall and dollar fluctuations all pushed the price of crude oil futures down. Brent crude oil futures lost .99 percent to trade at $75.34, down 3.56 percent from a month ago.
Oil has been trapped in a narrow band between $70 and $80 per barrel for much of the week, with signs of renewed demand pushing against fears of economic weakness.
A report on Thursday said that industrial production and manufacturing New York had expanded only incrementally. China also posted slower gross domestic product growth, although this was not unexpected because of the government’s commitment to cooling down its economy.
A report from the International Energy Agency, a Paris-based energy watchdog, said Tuesday that fading hopes of a quick recovery and greater enthusiasm for fuel-efficient vehicles would cut into demand growth for oil.
However, these factors will be somewhat offset by increasing consumption in Asian economies like India and China.
In other oil-related news, BP announced that it had completely sealed off the leaking wellhead of the destroyed Deepwater Horizon drilling rig. The company will now conduct pressure tests to asses the integrity of the well structure before attempting to shut it permanently.
Risk Disclosure
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.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
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 third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.
