RE:RE:Where Crude Oil is heading Next weekMisbah,
Also of some import this week will be the Fed notes. Depending on the wording in the meeting Wednesday, with possible hints on Tuesday, we will get guidance on the timeline of interest rate hikes in the US. Of course a sooner rate hike will impact the USD positively and thus pressure commodities like oil and gold. Would probably impact equities as well as investors start to wind out some cash as they start thinking fixed income looks more attractive on a risk/reward basis.
FingBucko wrote: Misbah,
IMOP... we are looking for something that is different than the pattern we have been seeing.
Wednesday the Oil storage numbers come out again like every Wednesday. We will add to the build of course as we know that the production hasn’t been affected as of yet. Therefore we see more downward pressure on price of oil. that’s Wednesday.
On Friday we will see the Rig count numbers again and will see that they are reduced again to which has little short term effect unless we see them drop much greater than 60 rigs. Since the January Rig count numbers, and the following brief oil rally, this number has been mostly ignored as it does not reflect a production decrease in the near term. Rig count numbers and their effects on production are more a medium term indicator of dropping production seeming 4-5 months ahead.
If the US dollar continues its strength against other currencies then we will continue to see Oil and commodities under pressure. Japan and Europe keep pumping $ into their markets in their form of QE so the $US will continue to be a source of strength.
For fun ill attach a USD/OIL/GOLD chart and you can see the relationship has USD inverse with Oil and Gold.
OIL/USD/GOLD historical chart
All just my opinion since you asked. Happy to hear other takes on this.
Cheers!
Cheers!