Commodities  |  October 04, 2012 11:40:00

Oil on QE3 after a two-month low

Last week we wrote that there are two different scenarios for future oil price developments. The first one is based on fundamentals, and results in a decline in oil prices. The second is based on the expectations and leads to an increase in oil prices. The article was written at a time when oil WTI after attacking maxim 100 USD per barrel, after the announcement of QE3 (September 14), ended her two-month upward trend and began to hurtle headlong down. Declined by 10% and stopped just below $ 90. The sharp fall was predicted from a technical perspective and fundamental divergence was confirmed by news that Saudi Arabia is ready to increase daily production.

After a sharp fall followed by correction and lighter oil is returned to the level of 93 USD per barrel.Yesterday but again faced a dramatic downturn when weakened about 4.5 percent.

The reason was the publication of a report that production in the U.S. climbed to a 15-year maximum, while decreasing its consumption under the influence of weaker economic growth.

Total oil supply in the U.S. market is growing not only due to higher production, but also due to release in stocks. Yesterday was also the amount of oil released in the U.S.. Instead of the expected increase of 1.6 million barrels, inventories fell by 0.5 million barrels, which is the second weekly decline in a row.

From this simple logic, it is clear that if the U.S. will increase the amount of available oil, its price will fall. It is understandable that the U.S. government has an interest in ensuring that the price of black gold grow. Since then subsequently increasing the cost of production and transportation of goods prices, fueling inflation.Neither one nor the other is not beneficial for the local economy. Higher prices of consumer goods zbrzďují domestic consumption and also raise inflationary pressures after the third round of monetary easing is not at all desirable.

The graph shows that oil could find support at the lowest level of 86.70.

For further development of the price of oil will be critical reports on the amount of mining in both the U.S. and Africa. Indicators of economic performance data and the largest economies in the Middle East.

In addition, activities of the central bank's monetary easing leads to the potential for inflation, and thus to increase the price of black gold.

Furthermore, we can not forget the negative correlation between the development of oil prices and the USD. Leads to a weakening of the USD strengthening oil prices and vice versa.

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Ropa po QE3 na dvouměsíčním minimu

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