Stimulus Plan from China May Trigger Short-Covering Rally in Crude Oil

Although the worsening global recession is leading to fear of less demand for crude oil, the announcement of a new stimulus plan by China may provide enough good news to trigger a short-covering rally today. Gains could be limited by expectations of an increase in oil ending stocks.

Speculators seem to be more concerned about falling demand rather than the possibility of a new production cut by OPEC later this month. Although Russia, Iran and Venezuela are in favor of a cut, it is unclear at this time whether all members will vote in favor of decreasing supply.

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Posted by James A. Hyerczyk at Wednesday, March 04, 2009 7:04 AM
Categories: Energies
Tags: Heating Oil Crude Oil Natural Gas Unleaded Gasoline
 

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