The Energy Space
Energy Price Outlook
A mid-morning attack by Israel of a Hamas leader yesterday sent the oil market higher, but unless the tensions escalate in the near-term, we would anticipate prices to continue moving lower. The next key support below $84.05 is offered near the $80.00/bbl level. A major source of pressure will be the adjustment in growth expectations following the election and the upcoming fiscal cliff. A continuation of slow growth and possible brinksmanship on the cliff should cause risk to be re-priced and investors to liquidate holdings with capital gains and/or dividends. Fundamental pressure will come from continued elevated levels of oil production and inventories, Tuesday's reduction in global oil demand by the IEA, and relatively steady oil rig count numbers. Support will be offered by improved Chinese oil imports released over the weekend and by reduced shipping rates in the Keystone Pipeline. Yesterday's API numbers were slightly positive relative to expectations for today's DOEs. We would trade the oil market as a negative affair in the near-term....1783 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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