Sarkozy is ousted as oil investment falls
Crude oil prices fell to their lowest levels since early February today, marking the fourth straight session that the high risk commodity has spent in negative territory, as France’s new Socialist government incited concerns of another recession. In addition, weaker than expected economic reports out of the rest of Europe and the US contributed to the fall of oil investment on the charts.
Both France and Greece elected new states over the weekend, creating new doubts as to whether the austerity plans put together by the euro zone would continue to take place uninterrupted. The dollar rebounded on the currency index as a result of the fears floating around the euro, causing foreign traders to sell off their stakes in crude, fleeing to safe havens instead. Oil investment tends to lose footing whenever the greenback advances against the euro on the polls, as the commodity becomes too expensive for non-domestic sectors.
The rapidly waning sociopolitical issues plaguing the Middle East last year have also affected investments in crude negatively.
West Texas Intermediate futures for June delivery fell 55 cents to $97.94 per barrel on the NYMEX market. The American benchmark has now lost more than 11%in a mere four days, a downward trend that is expected to continue for the rest of the week.
Potential supply halts in the East were the only factors keeping crude investments from bottoming out.
The US is now in debate as to whether to reverse the prolific Seaway pipeline in order to ease the glut overtaking storage hubs in Cushing, Oklahoma. Inventories of crude now stand at their highest levels in two decades, causing many traders to rethink their investment strategies.