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Hansen: Why crude could drop to 90 dollars
WTI crude oil could be heading to ninety dollars per barrel, gold is still looking friendless and coffee's benchmarks have gone their separate ways. Saxo Bank's Head of Commodity Strategy, Ole Hansen, assesses just what's going on on how you could be positioned.
For the first time in twenty-five years, WTI production has breached eight million barrels per day. The spread to Brent is the widest in more than eight months and it's also on its longest losing streak in five years. Not surprisingly, Ole is playing both of these to the short side.
Gold's momentum still seems to negative. Ole says traders need to be prepared for any surprises from economic data from the States next week, notably the non farm jobs report on Friday.
Interestingly, instant coffee, made largely from the cheaper Robusta variety, has gone up in price while the more expensive Arabica beans are falling. Robusta coffee's up due to slowing shipments from Vietnam, the world's alrgest grower. However, Ole says Arabica is starting to find more positive momentum. The big question, of course, will it last?
01:49 minutes
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