Monday, January 21, 2008

What's up with oil prices?

Oil prices in the world market, today, fall to 89.00 dollars per barrel. US crude fell by $1.57 to $89.00 by 1417 GMT in electronic trade, just off a session low of $88.67, which was the lowest level since Dec. 11.

So, is it a good time to buy or to sell oil? What do you think?

First a few questions that we have to answer:

1. the oil demand of China and India are for real.
2. was the oil price in December that reach 100 dollar per barrel oversold? is the price movement today just a correction?
3. what is the real thing about supply?

IMO, oil can still get lower. If the price reach 85, either the speculators would get out dropping prices to 80 or lower, or they would buy more to stave off losses? Which is which?

I'd say, I'll buy when it reach 80-82. That is buy low, and sell high. If ever, this trade has low risk, I mean oil can't go 75 with the current value of the dollar and with the current demand from China and India.

Let us wait until it reach 80-82.

On the news today from Reuters, taken from PDI:

LONDON -- Oil slid by almost $2 to a six-week low below $89 a barrel on Monday as stock markets fell and concern mounted over an economic slow-down led by top consumer the United States. Oil has dropped by more than 10 percent from a record high of $100.09 hit on Jan. 3.


PS: Do not follow my trades, ask a professional trader for advice. Trade at your own risk.