Crude oil futures for October settlement fluctuated in the Asian session and were biased to the downside with the choppy trading on rising fears over the outlook for growth. Crude oil remains somehow steady with the major events eyed today and developing storms.
Crude oil futures opened today at $90.10 recording the high of $90.15 and the low of $88.96 a barrel and currently hovering around $89.10 a barrel. Oil is moving slightly lower in relief to the rally seen the past two days where the contract settled at the highest close in almost a month yesterday since August 03.
The gains were supported yesterday with the reported drop in crude inventories. The API said inventories fell 2.97 million barrels ahead of the EIA report today which is expected to show that inventories dropped 2.0 million barrels last week as Tropical Storm Lee disrupted output.
Upside support is seen from the drawback in inventories and the track of storms in the Gulf of Mexico which we expect will fuel choppy trading today. Nate has joined Hurricane Katia and Tropical Storm Maria, where Nate is forecasted to be a Category 1 storm which investors still keep track of to see if any supply effect will be seen.
Still, the overall sentiment is jittery where Asian stocks today fluctuated heavily with the reported unexpected job losses in Austria and slump in Japanese confidence coupled with expectations that the PBoC might move again with monetary tightening.
The market in Europe is in a standstill mode awaiting the BoE and ECB rate decisions which will define the outlook for the debt-laden and growth sluggish continent.
Major focus will also be on President Obama’s address to Congress around 23:00 GMT where his jobs speech will be the highlight and a strong step from the president with an expected package of around $300 billion of taxes and federal spending to be directed towards stimulating jobs growth.
High volatility will be evident today and the outlook remains highly uncertain and hopes are for the central banks and governments to start to clear the haze over the recovery.