The price of oil dropped as the economic conditions in the U.S. and Europe worsened due to low levels of consumer confidence on both sides of the Atlantic, The Street reported.
The drop has been partially attributed to the exit of Juergen Stark from the European Central Bank, as the executive board member cited personal reasons before stepping down from his leadership role.
Stark's resignation came at a time when the bank is in a vulnerable position concerning the ongoing debt crisis and the poor fiscal situation that many of the European countries are in, according to The Street.
The demand for oil may drop in the near future, because of these developments and a world economic slowdown that has been projected, The Wall Street Journal reported.
"For now, we see a relatively controlled slowdown on the [oil] demand and as long as supply continues to disappoint to a similar extent, prices will stay where they are for now," Andy Sommer, an oil analyst at EGL, told the news source.
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.