Will Obama's Package or Falling Chinese Demand Move Oil?

Source:

“Obama’s stimulus package and falling Chinese demand for oil are the most important drivers for crude oil futures in the months ahead.”

Rumors about the size of Barack Obama's stimulus package sent oil prices higher this morning. People familiar with this matter say that the stimulus package may reach 1 trillion dollars versus the half trillion considered just two weeks ago. This is very bullish for crude oil prices because it’s a very inflationary measure and is a possible real stimulus for a very depressed economy.

In China, the growth in passenger car sales has virtually stalled since last summer, after rising at double digit rates for several years in a row. Its industrial production grew at the weakest pace in nine years as export growth fell. Output rose 5.4% in November from a year earlier, compared to a growth of 8.2% in October. That is a very bearish signal for crude oil. Is this China slowdown totally factored in prices? The stimulus package and the falling Chinese demand for oil are the most important drivers for crude oil futures in the months ahead.

Related Articles

Get Our Streetwise Reports Newsletter Free

A valid email address is required to subscribe