The price of oil is up in early trading this morning as traders are less concerned about the ‘super committee’s ‘ failure. While the super committee failed to reach an agreement on substantial debt reductions, there will be $1.2 trillion in automatic budget cuts triggered by this failure. Traders are realizing today that this doesn’t effect near term growth as the cuts are spread over 10 years and don’t take effect until 2013.
Crude oil prices for January 2012 delivery are trading up $1.24 this morning at $98.16. OPEC is looking to cut output at their December meeting according to Iraq’s Oil Minister Adbul-Kareem Luaibi. This comes as analysts expect demand for oil in Europe to dip. Luaibi expects oil to trade between $100 and $120. Chad is also reducing oil exports of Doba crude in January.
Expect stocks and commodities to have volatile trading during the holiday week. Holiday weeks are notorious for below average volume which increases volatility.