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Oil prices trading lower after loosing two percent Monday
Published on December 8, 2009 by oilprices · No CommentsThe price of crude oil is trading lower after loosing around two percent on Monday’s session. US Light crude oil futures for January 2010 delivery fell 2 percent, or $1.54, to settle at $73.93 on the NYMEX, the lowest level in about two months.
“Crude oil prices have been in a downtrend since October 21st” said a report from Sucden Research in London. “Given the high levels of crude inventories as well as views that OPEC will keep the output quotas unchanged … it looks likely that fundamentals do not support higher crude oil prices.”
The US dollar traded higher than it has for a month against the Euro Monday and crude prices fell sharply, demonstrating how much heft the US dollar has in energy markets.
Some experts say that the uncertainties of the economic recovery and the high inventories of crude and fuels in the United States do not justify oil prices near $80.
Oil prices have been less influenced by moves in foreign exchange and equity markets over the past month than at any time since March, with supply and demand reasserting control as the price drivers.
The correlations that held sway over oil prices during much of 2009 are waning. But analysts say they may return in 2010, although in weaker form, causing oil to rise when the value of the dollar falls, or when equities rise.
“Higher equities, a weaker dollar and higher oil prices were a triumvirate for much of this year,” said Peter Beutel, president of the Cameron Hanover oil consultancy in Connecticut.