Betting $50 on the oil

“Oil investors often look to stock markets as a measure of sentiment on the overall economy, but crude has risen from below $35 a barrel last month despite the major U.S. equity indexes plunging to 12-year lows last week.” (AP)

Oil is rebounding after weeks of decline! The oil price rose today above $46 a barrel after it settled on Friday above $45. Oil inventories have decreased after six consecutive weeks of piling up. According to Bloomberg, traders are betting “that $50 crude is two months away.” The price of the crude has increased as OPEC plans to further slash global production at its meeting in Vienna in one week. Investors expect a cut of 500,000 barrels a day.

“Oil is rallying primary due to the speculation that OPEC will cut production,” said Victor Shum, an energy analyst with consultancy Purvin & Gertz in Singapore. “The market in the last week or two has paid more attention to supply because the OPEC cuts have shown up in the data.” (AP)