Crude oil rose today on the back of Obama speech, as he declared a $447 plan to bolster the U.S economy, especially the labor sector as it fell to the rock bottom after the jobs report came much worse than expected, as it showed a zero added jobs in August which affected the confidence in the U.S economy.
The U.S president Barack Obama announced his plan for boosting the economy and the labor sector, actually, a $447 plan by tax cut and more spending would bolster the economy and take the growth higher, Obama challenged the U.S Congress to pass the plan.
Obama speech has affected crude oil positively, increasing bets that the U.S economy will improve after the activation of the plan, which will increase the future oil demand from the world’s largest oil consumer.
A tropical storm is expected to hit the U.S Gulf of Mexico, which has affected the American companies that extract oil from there, and accordingly it affected the U.S oil production as the EIA report showed that the U.S. commercial crude oil inventories decreased by 4.0 million barrels from the previous week, where the expectations were to drop by 2.0. now, U.S inventories are at 353.1 million barrels but it still above the upper limit of the average range for this time of year.
Crude is trading within a narrow range with a mixed sentiment in market s, as Crude oil futures for October settlement retreated today after the opening at $88.63 per barrel, recording so far the high of $89.47 and the low of $88.30, and are currently hovering around $88.33 per barrel.
On the other hand, the dollar index that measure its performance against six major currencies, rose today to record a high of 76.37 after the opening price at 76.26 and recorded the low of 76.03, where it is currently hovering around 76.30.
Yesterday, the ECB chairman, Jean-Claude Trichet said that the current economic conditions remain highly uncertain with downside risks to growth, while inflation is expected to remain above the Bank’s target of 2.0% in the coming months, where he provided that the bank forecasts for gross domestic products’ growth was revised lower and could average between 1.4% and 1.8% in this year, while forecasts for 2012 averaged between 0.4% and 2.2%.
Although, jitters remain in the markets over the global recovery, as the U.S economy is weak and showing a slow pace of growth and a bad outlook for the recovery. Also, the deepening sovereign crisis in Europe has made investors concerned about the future of Europe and if the continent will survive from the crisis.