Oil Price Futures and Forex Market Report
|Last year oil was a key newsmaker along with the issue of the global financial crisis. Having reached the high of $147.26 per barrel on June 11, 2008, it lost 70% of its price in half of a year. Analytics assume that the main reason for the fall was overheating of the market caused by speculative capital. From the fundamental point of view, $100 per barrel was acceptable, but $140 was too much.
Eventually, in late 2008 oil stabilized within the range of $40-50 per barrel, and by spring it fell to $38-42 per barrel.|
It was not bound to the dynamics of the American currency as in the first half of the year. It is hard to tell whether the oil market actually bottomed out. Six month ago it was overbought, but now it is clearly oversold. At that time the fair price was $101, and now, amid the global economic woes, a new fair price is $70-90 per barrel.
The financial crisis entailed serious problems in the real sector of economy. Fuel demand started to decrease. At the same time, in the first half of 2008 oil price rise was not propped up by strong oil demand. In summer the world's largest agencies and investment companies predicted that the oil price would not to decline below $100 per barrel. Moreover, oil was forecasted to cost $150-200 per barrel by the end of the year. Such forecasts are not accidental, taking into account the fact that the biggest investment companies had their own positions on the oil market, and recommendations' rise benefited them. Participation of major funds and investment companies in the oil market rally became one of the reasons for such a fast price fall. Nevertheless, at that time the financial crisis overwhelmed the world and nobody cared about fraud on the primary market.
The liquidity crisis forced everyone to sell all the assets including primary contracts. Weak macroeconomic data and expectations of worse demand for fuel aggravated the situation all over the world. Crude oil market participants Oil suppliers Generally, crude oil reaches the market thanks to oil-extracting enterprises ranging from small companies to giant corporations. It is quite logical that a company's influence on the market depends on the volume of oil it delivers. Consequently, other market participants pay more attention to large-scale oil producers. Manufacturers This category brings together manufacturing companies of all sectors including oil refining and processing companies. However, due to some oil specifics, there is always a certain time lag for oil exporters and consumers, which makes oil deals a very delicate investment.
In order to understand more deeply the intricacies of crude oil as a trading instrument, you can refer to this section. World Financial Markets In the section World Financial Markets you will find the description and the operating time of stock, currency and commodity world markets, from NYSE and LSE to Forex and MICEX. GMT from Monday through Friday NYMEX The New York Mercantile Exchange (NYMEX) was founded in 1872; it takes the first place in the world in oil futures trading. Contracts for oil, gas, platinum, palladium, gold, silver, copper and aluminum are traded on this stock exchange.
According to the data of the Futures Industry Association, in 2006 216 billion of trades were executed here. In 2006 the NYMEX profit was equal to $497. A crude oil futures contract stipulates a 1000 barrel delivery of crude oil meeting a specific quality requirement. Price quotes of futures contracts are globally universal.