The price of oil traded at its highest value in more than two years in New York as indications show the recovery from the economic recession is becoming stronger, Bloomberg reports.
Futures for the commodity increased to their top level of $92.58 per barrel in New York on Monday following the U.S. factory index for the Institute for Supply Management notching its strongest amount in seven months.
"The actual situation remains quite bullish after some supportive figures on the U.S. economy," Hannes Loacker, an analyst at Raiffeisen Bank International AG in Vienna, told Bloomberg.
In December, the factory index reached 57, a 0.4 point increase from the month prior. Prices for crude oil have increased while supplies at stockpiles decrease, which indicates demand for the commodity is on the rise. Rising demand indicates more construction projects and similar-type work that typically consumes oil.
"But for the next couple of weeks it will be hard for crude to move substantially higher as fears about Chinese growth exert some drag, and the euro debt crisis will be back on the table," Loacker said.
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.