Is a Crude Bottom Forming?

Despite countless stories of lower earnings, strikes, layoffs and bankruptcies throughout the oil industry, a growing group of adventuresome speculators have been quietly buying crude oil as it dipped below $48 per barrel this week.

While going against the crowd that now believes petroleum prices will go down "forever," they note a stunning drop in new oil wells and increasing demand for cheap gasoline and heating oil. Buyers are also quick to point out that many of pundits who are now predicting lower prices are the same ones who last year projected that crude could never fall below $90 per barrel.

As bulls and bears fought in the markets this week, prices swung wildly, moving as much as 10% during the day. By Friday, the buyers were winning as the midday price stood near $53.

Wheat Withers

Wheat farmers had a tough year in 2014, but 2015 isn't off to a much better start. Since January 1, prices have fallen nearly $1 per bushel, trading as low as $4.93 on Tuesday in Chicago, the lowest price in four months.

Wheat is falling as the world is expecting an overwhelming supply after last year's record breaking harvests in India, China, and the European Union, the world's three largest wheat producers. Meanwhile, US production has been dropping in recent years, hurting farmers who are seeing lower yields and less money per bushel.

Despite the negative news, US farmers got a small boost on Thursday when Egypt (the world's largest wheat buyer) announced it was going to increase wheat purchases from the US, which could help juice up demand and prices.

US Dollar Reigns Supreme

The US Dollar has been rising in value, gaining 20% against its foreign competitors as the US economy outshines the EU, Japan, Russia, and many others in recent months.

The greenback got another jolt Friday morning when a monthly government report showed over a million jobs added during the last three months, the best figure in almost 20 years. Rising US employment signals a healthier economy, which should allow the Federal Reserve to begin raising interest rates this summer. Rising US interest rates will help focus global investments toward the US since most other major economies are lowering rates as they try to stimulate their floundering economies.

Traders will be watching this trend, as the value of the dollar affects a plethora of other investments.