After a long and dramatic tumble, oil prices appear to have stabilized. However, forecasts suggest there may still be more downside ahead.
As the April futures chart below shows, oil has moved mostly sideways since showing some signs of life after closing at about US$45/barrel near the end of January. The April future is now trading at around $50, but some analysts figure the market is likely to sag further in the weeks ahead as the weather warms and the market loses some of the support it has been getting from strong heating oil demand.
Indeed, Bank of America Corp. warned this week that U.S. oil prices could eventually dip as low as $32/barrel, as we move into spring.
Oil prices have been under heavy pressure for months, due to heavy supplies and generally diminishing global demand. Total U.S. crude oil inventories were pegged at 434.1 million barrels as of last week, the highest in at least 80 years.
Lower oil prices have also been a drag on Chicago crop futures.
As the April futures chart below shows, oil has moved mostly sideways since showing some signs of life after closing at about US$45/barrel near the end of January. The April future is now trading at around $50, but some analysts figure the market is likely to sag further in the weeks ahead as the weather warms and the market loses some of the support it has been getting from strong heating oil demand.
Indeed, Bank of America Corp. warned this week that U.S. oil prices could eventually dip as low as $32/barrel, as we move into spring.
Oil prices have been under heavy pressure for months, due to heavy supplies and generally diminishing global demand. Total U.S. crude oil inventories were pegged at 434.1 million barrels as of last week, the highest in at least 80 years.
Lower oil prices have also been a drag on Chicago crop futures.
Comment