Tuesday, March 16th, 2010
Crude Oil Could See a Further Pullback
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Exxon Mobil Corporation (NYSE:XOM), Petroleo Brasileiro SA (NYSE:PBR), Chevron Corporation (NYSE:CVX) and other energy companies could see another pullback in oil prices following comments out of OPEC and increasing political pressure.
Oil prices have been rising steadily past the $80 per barrel mark due to increasing demand in China and a continued recovery around the world. However, economists worry that higher prices could dampen the economic recovery and political pressure to bring prices back down is rising. As a result, many experts see the commodity’s upside as being somewhat limited.
Earlier this week, Saudi Arabia indicated that OPEC would not let global oil markets get too tight, suggesting that it may be getting worried with oil prices recently over the $80 per barrel mark. The cartel’s preferred price range is between $70 and $80 per barrel, but it is still unclear whether or not it will raise production targets to lower the price.
Other analysts believe that oil will continue to rally over the medium-term as traders continue to play games with the market. Meanwhile, investors will look towards a number of upcoming reports to guide trading. The Federal Reserve will decide Tuesday whether or not to raise its discount rate, while OPEC will meet on Wednesday to discuss the situation.
On the technical end, a look at the commodity’s recent trading history and candlestick chart patterns suggests that the commodity could see a near-term bearish outlook as well. Click on the video below to view an analysis by INO expert Adam Hewison:
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-- Written by Simon Monger
