What's Moving the Oil Markets?
•IPE Brent futures in London continue to fall in trading
on Monday as global commodities come under pressure with inflation fears due to
the weak dollar and uncertainty over the direction of interest rates pushing
crude prices downwards, brokers said. There has been a rush to sell commodities
as traders worry over the health of the global economy.
•Technical factors leading to the falling value of crude futures is the
reduction in net long positions as large funds look to offload positions onto
smaller speculators who do not have the financial clout to sustain the price of
crude futures.
•In other news, the IEA released a report on Friday saying it now expected
global oil demand to rise by just 1.25 million b/d this year rather than the
1.47 million b/d it had forecast in its previous report. This news initiated the
softening in the price of crude futures but is more a peripheral factor in terms
of global events, and will act as an anchor on any potential recovery in price,
according to traders.
Updated: 05/15/06
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