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Oil Recovers to Weekly Gain on Its 3-Day Rally

August 27, 2010 at 15:24 by Andriy Moraru

Despite falling down for the first two days of the week, the crude oil is managing to show a positive weekly advancement as of today, while the current daily gain isn’t something exceptional. As with the Forex pair of EUR/USD, GDP data helps.

Oil is a perfect bet when the market believes in the economic growth or recovery. Today we’ve got another proof of that, as the oil rose despite having a moderate weakness; the riskier traders bought it before the GDP release in the United States (1.6 percent growth in Q2 2010). During the first two days of the week, oil lost about 2.8 percent of its value but, starting from Wednesday, it’s showing a moderately strong rally.

This year, the level of $70/barrel looks to be a major bottom limit for this commodity — it was proven for the 4th time this week. Analysts hope that in the near future we’ll hear some positive growth-assuring rhetoric from the world’s officials and that it will be able to support the oil prices further. At the same time, further increases on the oil inventories (and this week we’ve witnessed a report for more than 4.1 million barrel gain in US) can put the prices at risk.

Crude oil (Brent) is now trading near $75.29 per barrel as of 13:21 GMT, going up from $74.85 open price. It traded at as low as $71.75 on Wednesday.

If you have any questions and comments on the commodities today, use the form below to reply.

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