Last week black gold prices slightly gained on the back of the weak US dollar as the U.S released down beat fundamental economic data causing the dollar to fall. Investors were prompted to enter the crude market as a hedge against inflation and the falling USD. Also foreign investors were attracted to the markets as they hold a stronger currency which then it becomes cheaper for them to invest. The contract gained $0.73 as it closed at $127.35 while recording a high of $128.30 per barrel and a low of $124.67 per barrel.
Crude oil prices are steady today above the $127 per barrel as two Mexican ports were forced to shut down as a result of a strong storm they are calling Arthur. The ports are responsible for shipping 80% of crude as most of it goes to U.S refineries.
As this was supposed to cause a rally in prices, but instead it was offset by hedge-fund managers and speculative betting on high prices as finally U.S regulators are investing the reason behind the massive rise in prices witnessed lately as it was believed it was due to speculative trading. OPEC already was against the pumping of crude in the market as they believed that supply was sufficient as there is a global slow down which is therefore dampening demand. Today the markets opened at $127.63 while recording a high of $127.63 per barrel and a low of $126.86 per barrel.
In my opinion I believe that prices will start surging once again adding to inflationary pressures as the hurricane season is approaching as around the corner affecting supplies as ports shut down like the Mexican port. Also now investors watch the dollar closely as they try to figure out the trend of the dollar as they try to make profits from the crude markets.