Crude oil is currently trading within a narrow range as investors are concerned over the future outlook for the global economy and especially the US which is considered the world’s largest oil consumer, as the EIA report showed a decline in U.S. crude stockpiles, in addition to rising fears about the economic situation which will eventually falter demand on oil.
Light sweet crude oil for October opened today at $85.06 a barrel recording the intraday high at $85.79 a barrel and a low of $84.91 a barrel and is currently trading around $85.62 a barrel.
The fluctuating dollar has eased some of the pressures forced on crude oil and commodities in general as we can see crude oil trading within a narrow range but it rebounded slightly to the upside; however, energy prices are expected to stay at low levels amid the rising recession-concerns.
The USDIX, which measures the performance of the green currency against six major currencies, opened today at 74.03 recording an intraday high at 74.10 and a low of 73.83 and is currently trading around 73.84.
Yesterday the EIA report showed that U.S. commercial crude oil inventories decreased by 2.2 million barrels from the previous week. At 351.8 million barrels, U.S. crude oil inventories are above the upper limit of the average range for this time of year. Total motor gasoline inventories increased by 1.4 million barrels last week and are in the upper limit of the average range
Moreover, the crude oil will keep fluctuating as the Fed’s Chairman, Ben Bernanke is the focus and investors expect him to announce more support for the faltering recovery, as central bankers worldwide gather for an annual meeting, where the Chairman’s announcement could reflect the Fed’s movements to support growth in the world’s largest economy, after the downbeat growth outlook in the states in addition to the huge deficit and the credit rating downgrade along with the slowing pace of recovery.
In the meantime, the financial markets and crude oil both are waiting for the Fed’s comments, concurrent with the release of data from the Ministry of Commerce which may show that the US annual GDP during the second quarter expanded by 1.1%, lower those expectations which indicated a growth expansion by 1.3%.