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Crude Oil and its derivative markets have fallen down a slippery slope since their summer highs. OPEC took no action in their meeting last Thursday to curb some of the supply glut the world is feeling. Since then, the oil markets have fallen even farther. See the charts below to get a good visual (courtesy of OEC Trader).

Why is oil trading this low? The quick and cheeky answer is that the bid and the offer came together to make a trade. While some smart-alick kid would likely give that answer, it does remind us of an important point. Oil is trading this low because someone thinks this is a fair price at which to buy and sell.

Refining our question will help: what would cause someone’s perception of a “fair price” for crude oil to drop from over $100/barrel this summer to below $64/barrel on last Monday?

Naturally, that is a question no one knows with absolute certainty, but we’d like to point you in the direction of some insightful resources across the web. Click on the links below.

Call your BROKER to discuss further. Is the CTA managing your account involved in Crude Oil? How might this price change affect other markets? How might you potentially profit from this price decline? Though keep in mind that past performance is no guarantee of future results.

January Crude Oil Futures

January Crude Oil

 

January RBOB Gasoline

January RBOB Gasoline

 

January Brent Crude

January Brent Crude

The Foremost Trading Team

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