Oil Down….Again..

Oil prices have hit six-week lows and a barrel is now worth $62.30, down 63 cents.  Now, the question is: is there a general increase in caution in the trading community?  Is everyone worried about what is happening in the global recovery that we were all beginning to see?

Things are getting confusing again.  Ok, so let’s do a quick round-up:

  • Oil prices have risen steadily and (fairly) quickly since the start of 2009
  • The general mood of late has been of ‘bottoming out’ of the recession – things can only get better
  • Overall good news from industry sectors as demand and production increased
  • ‘Green shoots’ becomes the word du jour again
  • V-shaped is the shape of the recession, say analysts
  • Business sentiment is up in the UK and Europe

Things were definitely looking up, weren’t they?  But, now the USA as the world’s most powerful economy, has put a couple of spanners into the works – 1. the latest unemployment figures were worse than expected and 2. fresh fiscal stimulus is being speculated over

Over in the UK, the BoE is planning new asset purchasing and Alistair Darling is going to announce the new FSA guidelines for the financial sector – set to be much stricter.

So is there an overall “down” mood or is the recession more W than V?  Some are saying that the dip in oil price is merely a correction on the too-early recent rally.

Stick with risk or head to the havens?  That is the most important question for investors right now!  Commodity traders are reminding us that while oil is down, precious metals are remaining consistent!

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