Crude Oil Forecast & technical analysis WTI Moves Higher Dec 16
- oil is trading at $57.35 per barrel
- oil witnessed a high of $57.44 per barrel and a low of $57.06
- support level is seen at $56.48
WTI Moves Higher – ongoing supply concerns triggered by the closure of the pipeline that carries the largest volume of North Sea crude oil.
The commodity is trading at $57.35 per barrel at 10:40 GMT this morning, 0.31% higher from the New York close. Crude oil witnessed a high of $57.44 per barrel and a low of $57.06 per barrel during the session.
WTI Moves Higher
In the New York session yesterday, crude oil rose 1.56% to close at $57.17 per barrel, aided by ongoing supply concerns triggered by the closure of the pipeline that carries the largest volume of North Sea crude oil. Meanwhile, the IEA reported that global oil supplies grew by 170,000 barrels per day (bpd) in November. An immediate downside, the first support level is seen at $56.48 per barrel, while on the upside, the first resistance level is at $57.83 per barrel.
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Commodities Buyers and Producers
The sale and purchase of commodities is usually executed through futures contracts on exchanges that standardize the quantity and minimal satisfactory of the commodity being traded. As an example, the Chicago board of trade stipulates that one wheat agreement is for five,000 bushels and also states what grades of wheat can be used to meet the settlement.
There are sorts of traders that change commodity futures. The first is customers and producers of commodities that use commodity futures contracts for the hedging functions for which they were first meant. Theses buyers truly make or take delivery of the actual commodity while the futures agreement expires. As an example, the wheat farmer that vegetation a crop can hedge towards the hazard of dropping money if the charge of wheat falls before the crop is harvested. The farmer can promote wheat futures contracts while the crop is planted and guarantee a predetermined price for the wheat at the time it’s far harvested.
Theses traders in no way have the desire to make or take transport of the real commodity while the futures agreement expires. Among the futures markets are very liquid and have an excessive degree of each day variety and volatility, making them very tempting markets for intraday buyers. A number of the index futures are utilized by brokerages and portfolio managers to offset threat. Additionally, since commodities do now not generally exchange in tandem with equity and bond markets, some commodities can also be used correctly to diversify a funding portfolio.
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