Wednesday, July 23, 2008

Crude Oil Bubble Burst ?


Today all the sudden, the Crude Oil prices for August delivery tumble across the board. This is a very good sign. From the charts reading, indeed it was a good scenario for the world economy. If we look back from last year Crude Oil Prices movement, it had never been the prices of the Crude Oil fell sharply in six trading days.

At 12.50 am (Malaysian Time) the Crude Oil Prices trade in New York Mercantile Exchange for August delivery down sharply USD -4.14 per barrel at USD 126.90 per barrel.

Usually when there is a correction, the Crude Oil prices will move in range trading in between USD 10.00 to USD 15.00 per barrel before any attempt to move higher. But this time the movement from the all time high created on 11.07.2008 at USD 147.27 per barrel down to USD 125.63 per barrel (lowest level). A minus of USD -21.64 per barrel.

Is this a huge correction or just a temporary downtrend movement for the Crude Oil (Oil Bubble) ? A careful look on its charts and a preview for the past few days movement suggest it maybe an OIL BUBBLE BURST.

This will create a temporary measure for the shares involve in Airlines Industry, reducing their losses on Jet Fuel prices and even to the whole economic around the globe.

"Many reasons are being cited for the oil price boom – speculation, fundamentals, dollar weakness, fuel subsidies, inflation, low interest rates. These factors are playing a part at some time or another, with different factors dominating at various times.

But one factor stands out as the biggest culprit – SPECULATION." - Dali

2 comments:

Anonymous said...

Non-conventional supplies of crude oil will play an important role in the generations to come.

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