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Hansen: Get your teeth into the oil bear market
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A couple of months ago you'd be laughed off the trading floor if you'd suggested that oil prices would dip below ninety USD, well it's no laughing matter now as both Brent and WTI have entered a bear market. Head of Commodity Strategy Ole Hansen outlines his thoughts about trading the market and looks ahead to next weeks market conditions. In his weekly update Ole says:"...the energy sector continued to slump as rising supplies are hitting a market where demand growth is slowing. We are now into a capitulation phase as the price of both WTI and Brent crude have broken levels that very few saw possible just a couple of months ago.".
Good old 'Doctor' Copper saw gains of 0.4% this week but the metal is "perched on the edge of a cliff" according to Ole and if concerns over global growth deepen then the commodity which is often used as a thermometer for the world's economy could be pushed over into a steep fall.
Ole outlines his trading strategy for the spread between WTI and Brent with the Brent premium on Dec futures currently at 5.9 USD per barrel and likely to widen.