Last month we noted that WTI appeared to be range- bound, seeking direction, whilst changes in the crude oil open interest positions on NYMEX suggested that the participants were expecting an increase in WTI. This interpretation of the market's expectations seems to have been vindicated, for WTI has staged quite a rally, which at the time of writing had taken the price of light, sweet crude just past the $50/bbl mark from a low of $35/bbl in mid-February. Once again the futures market has dragged the oil price to levels seemingly unsupported by the fundamentals, for the US economy remains mired in recession, the world economy has followed suit, oil demand continues to decline across the globe and US crude oil stock cover is considerably higher than last year (3.5 days' worth higher).
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