Oil Prices - May 19

[dan_s]

Speculators drive crude oil prices. To be more specific, their day-trading drives the price of NYMEX futures contacts. The price you see on the news for WTI oil is the front month NYMEX futures contract.

The only reason I see for todays $2/bbl drop in the oil price is that the U.S. dollar index is up today.

When the school year ends this month, demand for transportation fuels increases.

I think WTI will flop around in the $55-$60 range through June. Then we should see a rising pattern, but it will not be in a straight line. In 2009, when WTI worked its way back to the trend line, there were many peaks and valleys.

[setliff]

those speculators also had to shed their holdings today--end of june contract.

[dan_s]

Wednesday oil storage report will have a big impact on oil prices.