Akara Group International Remains Bearish on Oil
Jinbo-cho 1-chome, Japan, January 28, 2016 (Newswire.com) - Akara Group International Asset Management, the Tokyo based Asset Management firm provided analysis as to why market conditions and key decisions made in the past week are likely to effect the continuous decline in the price of oil.
As Iraq announced on Monday that it’s crude oil production is at a record high, gains from the previous week were wiped out as global supply continues to substantially outweigh demand.
Without pressing the alarm button by crying out recession, the key indicators point towards less than ideal manufacturing number and economic growth across the key geographies has been underwhelming to say the least.
Frank Winters, Chief Trading Analyst
Speaking from Akara Group’s Tokyo office, Frank Winters, Chief Trading Analyst, delivered his short-term forecast on the price movements of crude.
“The increase in price last week was supported by Mario Draghi's announcement as the ECB provided a strong indication that a further monetary stimulus could be injected into the economy as early as March this year.”
“As a result the position was fundamentally oversold at the start of the week, and as we witnessed, short trading was essentially squeezed out towards as the week progressed.”
As traders continued to sell off their positions at the start of this week, primarily as a result of unchanged fundamentals, Akara Group’s Frank Winters expressed his concerns that lower prices should be expected for the foreseeable future.
“The economy is finely balanced at this stage and just as we are seeing lower interest rates continuing their downbeat trend, we think that oil will remain low for some time to come.”
“Without pressing the alarm button by crying out recession, the key indicators point towards less than ideal manufacturing number and economic growth across the key geographies has been underwhelming to say the least.”
“We expect to see violent price fluctuations as market mentality shifts from buying the dips to selling the rallies. Naturally short trading does very little for investor confidence over the medium to long-term.”