Crude Slightly Lower
Jun 9th, 2009 | By Doug Casey | Category: Oil Investment & Alternative EnergyIn the energy market on Monday, crude for July delivery slipped slightly lower, closing at $68.09/barrel, down 35 cents. July reformulated gasoline fell a penny and a half, to $1.94/gallon.
Market watchers continue to line up almost unanimously behind the notion that the recent rally in crude is overdone.
“From a fundamental point of view, the outlook remains subdued,” said analysts at Commerzbank. “Oil demand remains weak, while supply is being expanded at present, leading to rising oil inventories.”
Zachary Oxman, managing director at TrendMax Futures, concurred, saying that, “I think it’s time for a bit of a respite for both crude and stocks … Gas prices at the pump are becoming more of an issue again and if we see the averages move into the low $3 per gallon, I think that you will continue to see big supply builds as people stay home and drive less.”
And Credit Suisse analysts opined that the oil market on Friday was “torn between the negative effects of a stronger U.S. dollar and the positive effects from better-than-expected U.S. non-farm payrolls.”
They further wrote that, “The strong influence of currency movements on the oil prices is … a sign that the market is currently dominated by speculation.” Oil prices have moved ahead of fundamentals, but further price declines are “possible as actual demand remains weak.”
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Doug Casey is a contrarian investor, sought-after public speaker and author of several books. His work "Crisis Investing" held the position of # 1 bestseller on the New York Times list for 26 consecutive weeks. Doug's unusual views on the economy - and just about everything else - have gained a huge following in the investment community, and it certainly helps that his stock recommendations of undervalued junior exploration companies have made his subscribers millions. Now in its 27th year, Doug's monthly newsletter, the International Speculator, is one of the most established and esteemed publications on gold, silver and other natural resource investments. Together with the Casey Energy Speculator, it covers a broad range of carefully selected stocks with the very real potential of double- and triple-digit returns within 12 to 24 months.