Crude Oil Fundamental Analysis for April 19, 2011

Crude oil prices dropped on Monday amid concerns that global demand will drop due to high prices, while Saudi Arabia announced on Sunday it had cut its production by more than 800,000 barrels a day in March due to weak demand, which pressured oil prices to drop below $107 a barrel.

Moreover, Standard & Poor’s announced it downgrade the outlook for U.S. debt to “negative” from “stable”, which pushed investors toward low yielding assets including the U.S. dollar and that put further pressure on crude oil prices.

Investors and traders have shifted their focus recently from the political crisis in the Middle East and North Africa to demand levels, and whether the global recovery will suffer from high oil prices, accordingly, we should expect oil prices to drop at least over the short term, although the general trend remains to the upside over the long term.

Tuesday 11:00, Canada will release the consumer price index will be released for March, where CPI is expected to have continued to rise amid rising energy prices, as the report is expected to show that headline CPI increased by 0.6% on monthly basis, and by 2.8% on yearly basis, while core CPI is expected to increase by 0.2% on monthly basis, and 1.2% on yearly basis.

(Source: http://www.commoditiesmansion.com/fundamental-analysis/crude-oil-fundamental-analysis-for-april-19-2011/)