ENERGY | Supply Swells
S Bear
Crude oil prices could remain suppressed as long as the fundamentals favor bears, says Dharmesh
28 W
e’ve now entered unchartered territory of crude oil market, so
Bhatia, Manager - Commodities Market, Emirates NBD Securities
it’s no surprise that traders are pumping up the volatility. Bears are preparing the ground for major weak market sentiment. In the first week of the year, we witnessed the peak of the downtrend which has been prevailing for the last 18 months. Bears adopted hammering and brought down Brent crude oil prices below $30 at the new bottom since July, 2004. Also, the US benchmark WTI (West Texas Intermediate) futures
care
quoted below $30, a new bottom since February 2009. Already more than 10% crash in prices has occurred in the first week of 2016 itself and now bears have selected option market to prepare the ground to crash it further.
Bears are well aware that
several banks including Goldman Sachs have predicted that prices may crash to $20, expressing concerns about rampant production and record glut of the commodity. Currently, several fundamentals also are in the favor of bears.
www.wealth-monitor.com | February 2016
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