Commodity Trading Trends: Why Crude Oil Prices Are Slipping
It's really not that complicated:
Crude has lost more than 8% of its price in the trailing five days as investors watched the fossil fuel close below $100 for the first time in recent memory. “The Energy Department said last week that U.S. crude inventories have risen to the highest level since 1990. That was followed by the Labor Department on Friday announcing the economy added only 115,000 jobs in April, far fewer than the 165,000 analysts were expecting” writes Pablo Gorondi.The chart, click to enlarge:
Folks, there is a lot of money to be made in oil's price movements - and just as much to be lost. One investment web site I read said that oil funds, such as USO or DTO or UWTI, are not investments, they are trades because buyers have to be willing and able to get in and get out very quickly. And that can put you into the middle of Wash Rule trading, so be careful.
I am reminded of Will Rogers' advice on how to make money trading stocks: "Buy a stock when the price is low and sell it after it goes up. If it doesn't go up, don't buy it."
Oh, oil is up a little today.
Update - more insight:
“We’re facing price pressure on the supply side and the demand side,” said David McAlvany, chief executive officer of McAlvany Financial Group in Durango, Colorado. “We continue to see big increases in crude supply. There’s palpable fear in Europe, and it’s not limited to Greece” writes Mark Shenk. Yesterday’s inventory levels showed a jump to nearly 380 million barrels, the highest that stockpile has been in almost 22 years. Crude futures have shaved off nearly 10% in the last six days as some paint a bleak future for this commodity.