Oil Prices Remain Under Pressure as Investors Doubt Stimulus Plan

(CEP News) - Oil prices continue to trend lower as investors begin to doubt the U.S. stimulus bill will be able to jump start the faltering economy.

Expectations of weak demand remain one of the major concerns for crude oil, as prices continue to trade near $35.00 a barrel. This morning, WTI crude is relatively flat, trading at $35.02.

After Tuesday’s sharp selloff in oil prices, a lot of commodity strategists are expecting prices to continue to trend lower and eventually test the $32.00 area. Yesterday’s fears completely trumped news that OPEC could continue cutting production.

Strategists from Barclays Capital pointed out fears of weakening global demand will offset any more production cuts.

Phil Flynn, energy analyst from Alaron Energies said he is not ready to throw in the towel just yet. He added there is a chance prices could move higher in the short term.

“The markets have been beaten badly and are a bit oversold so they may try to rally,” he said. “A nice recovery should open up good opportunities to get repositioned.”

WTI Crude oil is up $0.12 to $35.05 while ICE crude oil is trading down $0.65 to $40.38.

Meanwhile, ICE RBOB gasoline futures are down $8.42 to $111.18 and Globex natural gas is down $0.01 to $1.25. Heating oil at the ICE is down $4.46 to $114.18.

In the mining sector, spot gold is trading down $0.24 to $970.01 USD. In Canadian dollars, gold is down $7.06 to C$1220.62. Silver contracts at the CBOT are up $0.16 to $14.28.

Bloomberg’s index for base metals is up 0.23 points to 107.17. Wheat futures at the CBOT are unchanged at $528.00.

All data taken at 11:28 a.m. EST

By Neils Christensen, neilsc@economicnews.ca, edited by Megan Ainscow, mainscow@economicnews.ca

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Posted in Categories: Commodities, Economy, Releases, USA.

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