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Hansen: Were you caught short on crude?
Wednesday's jump in crude oil took many traders by surprise, not least Saxo Bank's Head of Commodity Strategy, Ole Hansen. WTI futures went from a six month low to a one month high to more than USD 97.50 per barrel. The spike was caused by news that another pipeline is due to come on line in January from Cushing in Oklahoma, which is the delivery hub for WTI. That will help alleviate bottlenecks that we've been seeing building up in recent months.
Ole says we've now got positive momentum right across the energy sector. We're also at the time of year when traders are keen on defending their profits and positions. He says that unless we get any adverse news over the next few days we could potentially see this trend continue into the new year.
Ole says that the fact we're now above the USD 93 to 96 range, USD 99.60 is "now in sight" as far as WTI is concerned. Brent, however, looks "toppish" right now and the August peak of USD113.30 could offer some resistance. Ole says he's not keen on Brent at current levels.
The rise in prices comes as OPEC holds a meeting in Vienna. It's unlikely to make any production changes.
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