US light crude sets new three-week high

Market chaos has done little to dent US light crude’s steady progress higher.

As Peter Martin highlighted yesterday, like that of many other assets the crude price was hovering ahead of the FOMC’s decision to trim quantitative easing by a further $10 billion. But unlike many other assets, crude has managed to remain relatively stable and continue creeping higher. As much as the changes to the stimulus package may have scared off speculative traders, the underlying demand has remained constant.  

The severe bad weather that continues to blight the US’s south coast has been the main driving force behind the nation’s increased demand. And when you consider that we are only likely to see further inclement conditions, this should act as a solid support for the light crude spot price.

We could be in for a strange week, as China is celebrating its new year with a bank holiday stretching until Thursday 6 February.

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.