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Unconfirmed reports from within Alford & Sons Investments (API) suggest the investment firm now views Crude as having entered a Bear Market, after soaring to all-time highs back in November.
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Unconfirmed reports from within Alford & Sons Investments (API) suggest the investment firm now views Crude as having entered a Bear Market, after soaring to all-time highs back in November.
Geoff Williamson, Senior analyst at API, indicated recently that Crude Oil’s failure to rally off bullish news was the most pertinent sign that this was now a bear market.
“Prior to some of the bearish news we have heard more recently, Crude failed to rally off the back of reports that US Crude Oil inventories were down and The Organization of the Petroleum Exporting Countries (OPEC) were not planning to increase production during the peak winter demand season, both of which are clearly bullish news”, said the Analyst from Alford & Sons.
However, analysts at ASI noted that these factors were outweighed by rising stocks of distillate fuels, which include diesel. They rose by 1.4 million barrels against predictions of a decline of 300,000 barrels and gasoline inventories rose 4 million barrels, topping analysts' forecasts for an increase of 900,000 barrels.
Additionally, the so-called Iran risk premium, which is built into the price of crude and reflects geopolitical concerns, has also been reduced since the release of a report that grouped the findings of various U.S. intelligence agencies and contradicted the Bush administration's assertion that Tehran was intent on developing an atomic bomb.
Several unnamed sources close to Alford & Sons said the sentiment inside the firm was that the market was probably concluding that there will be enough oil to swing the supply picture towards a more comfortable balance in early 2008, while demand could take a knock from a recession in top consumer the United States.
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