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Analysts at “Sun Worldwide” are apparently confident that the current rally in oil prices is sustainable despite worse than expected economic data emerging from the United States in the past 10 days.
The Asia-based private fund is thought to believe that markets are being supported by wishful thinking in the absence of cast-iron fundamentals and sources suggest that even slightly bullish data will push the price of crude higher.
Much oil’s recent gain has been attributable to the colder than expected winter in the US which is expected to result in higher demand for heating oil as the winter progresses. The cold snap in Northern Europe is also helping to support prices.
“Sun Worldwide” sources say the firm is of the opinion that the recovery currently underway in emerging markets and especially in China, will continue despite the weak economic recoveries in developed nations. The weakness of the dollar is also playing a significant role in the ascent of the oil price as is concern over future supply side dynamics.
Although “Sun Worldwide” believe the oil price is likely to remain elevated for much of the year, the firm is confident that the second half of 2010 will herald the start of more sustainable economic numbers from developed economies and advises clients to heed its recommendations to purchase oil producer/refiner stocks for long term hold positions.
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