Speculation about decreasing stockpiles of crude oil in the U.S. answered worries about a weakening recovery from the economic recession in the globe's top consumer of the commodity, Bloomberg reports. Oil's price rose to its highest value in more than two years.
As U.S. consumer confidence decreased and home values slipped more than economists believed they would, oil futures declined as much as 0.3 percent on Tuesday.
"Jobs are hard to come by and the value of the single largest investment for most consumers continues to decline," according to a Wednesday note from Stephen Schork, president of The Schork Group in Villanova, Pennsylvania. "When you toss in the potential for $100 crude oil in 2011, we wonder why confidence is as high as it is."
The price for February-delivery crude oil rose 0.5 percent on Tuesday, settling at $91.49 per barrel. On Monday, crude's price was $91.88 per barrel, its highest value since October 2008.
"Consumers are clearly still anxious about the future," Peter Beutel, president of energy advisor Cameron Hanover of New Canaan, Connecticut, told Bloomberg. "Expectations had been for an improvement to 56, so the figure was not helpful."
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.