Crude oil showed a good upside momentum and touched a high of $73.23 a barrel at NYMEX which is an 8 month high. This recovery was seen due to an increase in demand on back of global recovery and summer driving season which is going on in US. There have been supply disruptions also from Nigeria due to some militant tensions.
Nigeria's main militant group raided a Royal Dutch Shell pipeline and disrupted a major export terminal, recouping losses caused by hefty builds in U.S. fuel stocks. On the other hand, the oil companies in gulf countries are also considering reducing the output. The Gulf state oil firm cut each of its term supplies for its four main grades for July by 18 percent last month and sources at term buyers said they are anticipating a cut around the same level for August supplies.
Trading platform that even a 5 year old can trade. Join now Together the supply and demand scenarios have led to the fall in crude inventories in US which have also shown a decline this month. During June Crude Oil managed to trade past $70/barrel after a gap of seven months at NYMEX. Market refused to succumb to any significant selling pressure as equities started performing poorly during the second half of the month. This higher relative strength vis-à-vis other asset classes does indicate that crude oil will remain amongst the strongest performing markets for July as well. One can expect the black gold to scale towards $77/bbl levels for the month and further higher if equities are to trade firm.
Courtesy: Religare Commodities Explore Commodity Online Mobile Services
