2 weeks ago when crude oil was rocketing up, many analysts came up with different explanations why crude oil would reach $140 and some said it would go till $180. That doesn’t seem possible to me anymore. Firstly let us see why everyone was so upbeat on oil:
US WOULD ATTACK ON IRAN
SUPPLY SIDE SHORTAGE OF OIL
EXCESS LIQUIDITY IN MARKETS
First reason seems to be very important one and looks like most important reason of price rise of WTI Crude. Well, that still is a case but why are prices going down now?
Second reason again was a temporary one which never actually caused any major shortage anywhere and can not cause oil to spike like that.
This leaves us with the third reason which was indeed why prices went up.
But, what has changed now then? What has changed now?
CONCERN THAT EUROPE IS IN RECESSION AND IT WILL PULL REST OF THE WORLD INTO RECESSION AS GREEK PROBLEM INCREASES EVERY NEST DAY.
PETROLEUM USAGE IS ACTUALLY DECLINING SO SUPPLY SIDE SHORTAGE ISSUE NO MORE EXIST
NO INDICATION OF ANY QE BY FED ANY SOON WHICH MEANS LESS LIQUIDITY
I think in near future the factors for decline of oil prices would be far more strong than those causing its rise. So, oil might continue its downward journey in coming weeks.