Tuesday, November 11, 2014

Strong Dollar Plus Oversupply Equals Falling Crude Prices by Brady Bunte

Several factors that could send crude oil below current levels one being a quickly strengthening U.S. dollar. A dollar breakout is reasonable to assume now that the fed has begun to increase interest rates. When this happens the dollar will strengthen much faster than we have seen in years and that would lead to oil going much lower. I think we could see prices in the $30 to $40 per barrel range if the dollar breaks out like I think it will. Brent crude dipped below $82 per barrel for the first time in four years. Oversupply will only accelerate the decline in price. On CNBC's "Fast Money," Pal said that oil also faces downward price pressures from oversupply and slowing demand. "In addition, you've got the biggest-ever position in the commodity in history, I think six standard deviations above its mean was the long positioning in oil," he said. "Then you put that into context with the dollar rally, and commodities tend to act the opposite to the dollar, so if the dollar rallies, oil falls." #BradyBunte #StrongerDollar #OverSupply #EqualsLowerCrudeOil

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