Crude oil investments future unclear

Crude oil futures sold for $80.48 per barrel this morning, showing signs of a slight raise, but an overall decline for the week. The perpetually weakening state of the high-profile oil commodity was propelled by the ongoing and largely unresolved debt crisis in Europe, which has led investors to believe that a default on the part of Greece and the subsequent recession afflicting the regions are likely unavoidable. This in turn drove the already struggling crude oil investments further down.

Yet some bullish news gave the sector a little room to breathe, namely, a significant decline in stockpiles was reported from crude oil inventories in the U.S., announcing an almost 5 million barrel drop. The news comes as a welcome change for crude oil futures, which were due to suffer from the initial prediction of supplies rising 1.5 million barrels instead.

Such a drastic drop in stockpiles is usually an indication of improving demand. Crude oil investments responded to the development with a slight rebound on the markets, giving investors a small hope that the week will end with the oil commodity paring losses, rather than extending them. However, realistically, in order for a commodity that has struggled for months to see a protracted period of grace, much more will be needed than a couple of days of slight gains and heavy speculation. Crude oil futures have had a tough five months, and despite Europe claiming new resolution measures in the works to combat the spiralling debt of the region, the sector will likely need something more concrete and long-term before it rebounds fully from the deep losses it has sustained over the year.

Of note of course is the fact that both weekly and monthly charts for crude oil point the oil commodity to post unexpected gains. Yet the markets still haven’t figured in the fact that Libya is poised to re-enter the field with full force. This will likely drive global crude oil investments down. The persisting unemployment issues plaguing the U.S. at the moment, and China’s slowed expansion efforts all point to the fact that crude oil futures still have a long and hard fight ahead.

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