Speculators are using the central bank announcements to drive current trends lower. At the moment that means pushing the US dollar higher and selling non US dollar assets such as commodities.
Oil fell to the lowest level in more than six years, and iron ore with a US$30 handle hasn’t been this low in more than a decade.
It is fair to say the financial markets have turned into a giant casino. It’s very difficult to separate real economic influences from the effect of speculative capital flows.
Given the ‘unnatural’ market forces driving commodity prices lower of late, I would not be surprised to see a large trade reversal post a Fed interest rate announcement.
OIL is now trading at levels that are unsustainable for many of the SHALE OIL producers that have a much higher cost of production. Shale oil exploration has reduced by more than 80% in the US and it is only a matter of time before the supply glut begins to diminish as global oil demand continues to increase.
I have been investigating various investment strategies to take advantage of a rebound in oil prices over the next 18mths, and have put together an investment that offers a staggering 53% return if West Texas Oil is trading higher than our entry level on the 21st December 2015.
To find out more about this asymmetrical OIL investment, click here.