Growth Concerns Weigh on Oil and Oil-Backed Loonie
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(eToro Blog) China’s disappointing PMI data from June, which showed another contraction in the key manufacturing sector there, helped to send oil prices sliding. London-traded Brent crude fell to below $90 a barrel, while U.S.-traded WTI crude oil slipped to around $78 a barrel. The news from the U.S. wasn’t any better; the recently published Philadelphia Fed Manufacturing Survey indicates that the U.S. East Coast manufacturing sector has slowed to a pace not seen in nearly a year was also not supportive of prices.
With investor worries that demand could fade as these global growth concerns escalate, the news that crude oil stockpiles in the U.S. and the Eurozone were on the rise has also kept a lid on any potential gains. However, as most analysts expect that the worlds’ ‘central banks will soon unleash more monetary stimulus which is supportive of growth, an eventual rise in oil prices is the likely outcome.
The Canadian Dollar, considered a petrocurrency, fell in tandem with oil prices. As of this writing, the USD/CAD was trading at 1.0276 and sentiment on OpenBook is overwhelmingly bearish meaning that it is in favor of the Canadian Dollar. Likewise, sentiment among OpenBook’s oil trade is also bullish in support of a rise in oil prices.
OpenBook trader chrisfo from Denmark closed out a pair of long oil positions just a short while ago which provided him with a gain of 35.5%and 47.3%. The trader’s 14.2% allocation in oil has returned 7.8% and along with other profitable trades primarily in the EUR/USD, has resulted in impressive statistics for this relatively new trader; for the last week, the trader’s P&L was 64.2% and for the month it is at 42%. Libyan trader ALLAMN closed out a profitable short position in the USD/CAD earlier, earning 31.1%
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