The dollar's reduction in value helped push up crude oil futures on Tuesday, Bloomberg reports.
Oil investing became more appealing to hedge against inflation while a U.S. Energy Department report on Wednesday is likely to indicate inventories slipped last week. The ongoing supply loss as a result of the continuing crisis in Libya prompted Goldman Sachs and Morgan Stanley to raise oil-price forecasts.
Memorial Day, which is coming up this weekend, represents the beginning of a heavy driving season as travelers hit the road for vacations.
"Oil fundamentals remain extremely constructive," Amrita Sen, an analyst at Barclays Capital in London, told Bloomberg. "Libyan supply is not going to come back to the market anytime soon. We should get a good Memorial Day driving season in the U.S."
At 8:40 a.m. on Tuesday, crude oil futures were up 1.59 percent, a $1.75 gain to $111.85 per barrel.
"It is only a matter of time until inventories and OPEC spare capacity will become effectively exhausted, requiring higher oil prices to restrain demand, keeping it in line with available supplies," according to a Tuesday note from Goldman Sachs analysts led by New York- based David Greely.
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.
