May 02, 2015 – Crude oil prices have been steadily gaining ground in the international market. After nearly a year of record dip in fuel prices, oil prices have at last started to move in the upward direction. And according experts an overly bearish sentiment and confluence of seasonal factors could set state for an even bigger rally in the coming months.
Oil prices have appreciated by 20% in the month of April that represents its strongest recovery since it started to fall in June last year. The market seems to be choosing and picking what to respond to, like ignoring production gains to focus on building inventory. However, some experts opine that oil prices are increasing on the notion that glut in supply will ease ahead of the peak driving season in the U.S.
The weakening of the dollar currency may also have played a part in rise of oil prices. When the dollar weakens, oil prices tend to appreciate as it makes it cheaper for investors who hold foreign currencies. U.S. dollar dropped to an eight-week low following the release of Q1 2015 GDP figures that revealed sluggish economic growth of just 0.2% in the first quarter, down from 2.2% growth in the previous quarter.
The prices may also have appreciated on the news of Saudi Royal Shuffle that had altered the line of succession in Saudi Arabia. The desert kingdom is still one of the largest producers of oil and also the biggest exporter. The world sighs at any news of change in the Saudi politics and it is closely monitored by oil analysts and market participants.
Surprisingly natural gas prices that usually follow the trend of oil prices have not changed by much during the same period. The structural charts are firmly bearish with gas prices expected to be on the same level in the next few months.
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