The price of Crude Oil continues to be volatile as it dropped over 130 pips from near $43 to $41.70 in the opening hours of today's trading. This comes about as analysts' expected Oil prices to hit $35 Dollars a barrel in the coming weeks. However, the black gold continues to defy people's expectations, as it rose in the week prior to today. The latest strength in Oil prices is largely due to the prolonged war in the Middle East between Israel and Hamas in the Gaza Strip. However, the market is moving on decisions that it couldn't make when markets were closed yesterday. The price of Crude may change as developments unfold throughout the day.
The current situation in the Middle East just shows that predicting the price of Oil is never 100% right. Oil continues to be a volatile commodity as 2009 enters its early days. If the Middle East crisis ends within a few weeks, then prices of Crude may stabilize. Also, it is important to see what the how the market re4sponds to the Middle East situation and the global economic situation in the coming weeks. For example, if things get dramatically worse economically in the weeks to come, the price of Crude is likely to slip. When the war in the Middle East ends, the price of crude is likely to slide. In the short-term though, the price of Crude is likely to rise on decreased production and uncertainty in the Middle East.