Entering text into the input field will update the search result below

Slow Global Demand And Higher Inventory Bearish For Oil

Apr. 23, 2013 2:37 AM ET
Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Read More : http://www.investmentcontrarians.com/stock-market/slow-global-demand-and-higher-inventory-bearish-for-oil/1883/

Oil drives the world.

But the problem now is that the industry is building up an excess inventory in available oil while global demand is dwindling, as the global economy continues to struggle with the aftermath of the Great Recession in 2008. The result: lower oil prices.

Some argue oil prices will easily rally back, but I'm not convinced, based on both the fundamental and technical pictures.On the chart, the near-term technical outlook for oil prices is bearish. Spot oil prices are below $90.00 a barrel for West Texas Intermediate (WTI) oil, and they're edging lower to the mid-$80.00 range.

Spot oil prices have recorded 10 new lows and five new highs over the past three months, according to data from Barchart.com. Over the past year, spot oil made 21 new lows to go along with only eight new highs. It's clear that the market bias is negative on oil prices.Based on the spot high of $106.16, reached on May 1, 2012, the spot WTI oil price is down 18.3% as of Thursday, which is nearing the official definition of a bear market.

GET THE BEST INVESTMENTS ADVICE FOR : Tech Stocks

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You