Crude Oil Gaining Ground?
Light sweet crude oil is a very special type of crude oil. It is much more sought after than regular crude oil. With light sweet crude oil, the refinery can make gasoline, kerosene, and high quality diesel fuel. Light sweet crude oil contains less than .05% sulfer and is much lower in other impurities. Since it already has fewer impurities, it requires much less filtering to create high quality products. Light sweet crude oil actually has a sweet taste to it. That is if you are brave enough to actually try tasting it.
There is also less wax in light sweet crude oil. This absence of wax means that there is less viscosity to the oil, making it easier to pump and less likely to clog up the equipment and processing systems. This is much better than the heavier crude oil that is very likely to clog and bog down all of the systems. One of the places that light sweet crude oil comes from in the United States is the state of Alaska. The refineries would much rather process light sweet crude oil than heavy crude because it is quicker and easier on their equipment.
Light crude oil is at its highest demand in the summer and in the winter. In the summer, people are usually driving to a vacation spot somewhere and using a lot of gasoline. It is also very warm, so the air conditioners are running full blast all over the country. Not many people realize that it takes more energy to cool the air than it does to warm it. So, air conditioning actually uses up more electricity, if you use it as much as you use your heater in the winter. In the winter, people are also going on vacations, often trying to get away from the cold winters, or heading north to go skiing. Once again, they are often using gas to get there. In the colder climates, the thermostats are turned up as people are doing their best to stay warm in the freezing temperatures.
The price of light sweet crude oil is lower now, than it has been in a long time. It has been hurting traders in the market as it steadily dropped. Lately, the price has been pretty steady in the high fortys and fiftys. It is still, no where near where the traders would like it to be. The Q4-2008 Market Club Results Chart Predicts that the NYMEX for the next three months will be: June 2009 opening at 51.20; July 2009 opening at 51.35; August 2009 opening at 54.10. With those kinds of numbers predicted, it doesn’t look like there will be much of a Bull market in light sweet crude oil anytime soon.
Others see the light sweet crude oil market in a totally different light. They feel that the market is rising slightly now, and that it will continue to do so. According to the most recent months charts,the predictions seem to be, that light sweet crude oil will gain a lot of ground over the next six months and show a lot of profit for the traders that have waited so long.
However, right now the market for light sweet crude oil is dealing with the problem of the flu outbreak in Mexico City and the fact that it has spread to the United States and other countries. The June delivery orders are down 1.41 barrels and to $50.14. That is a 2.7% drop. The demand for light crude oil may drop even more, if the pandemic continues to spread to other countries and deeper into the US. The US must find a way to stop the illness from spreading further before everything gets worse. The U.S. already has a lot of oil stockpiled, and is keeping the oil prices low because of this, which also has traders worried. The U.S. could cause the prices to go even lower.