|News||Crude drops below $80 after profit-taking|
|Analysis||Crude traded in the Asian session today below $80 per barrel pressured by profit taking as investors locked in on profits following crude’s 14% advance in the past three weeks.|
Crude contracts managed to jump from $69.59 per barrel since the fifth of February, after a wave of optimism engulfed investors' ability regarding the economic outlook and the recovery from the negative signs from the credit crisis, which had hit economies; meanwhile, motor gasoline, distillate fuel and crude stockpiles are insuring the weakness of demand levels on oil in the U.S which is still the case in other nations and it what’s holding crude from surging to the upside.
Expectations are for weak demand to prevail from the U.S. and Japan until clear signs of recovery in economic activity and steady decline in inventories are seen to ensure a rebound in demand levels. However, most expectations point out that the majority of trading this year is going to range between $75-85 per barrel, yet according to Goldman Sachs Group their new expectations are for crude to range $85 -95 per barrel.
Mounting expectations of growing demand from major industrial countries, specifically in Japan and China, will support crude prices and especially if global economies were able to surpass this tough tribulation.
The S&P GSCI index closed yesterday at 522.40, higher by 0.42 points; whereas the RJ/CRB commodity index dropped by 1.02 to close at 276.78.
In NYMEX as of 03:00 EST; heating futures inclined to $207.890 per gallon by $0.010; motor gasoline is trading around $211.820 per gallon after climbing $0.420; whereas natural gas contracts receded by $0.025 to record $1.870 per 1000 cubic feet. In London, Brent dropped by $0.090 to record $78.52.
Crude opened today at $80.05 per barrel, recording its highest at $80.35 and lowest at $79.72 per barrel, where it is currently trading around $80.15 per barrel.