Crude oil is trading within a narrow range today as investors are waiting to hear from Federal Reserve Chairman Ben Bernanke, who is scheduled to speak at a gathering of central bankers in Jackson Hole later today; expectations are indicating a new QE3 in order to stimulate the economy which has been suffering from a significant sluggish pace of recovery and growth lately.
Crude oil opened today at $84.74 a barrel recording the intraday high at $85.42 a barrel and a low of $84.79 a barrel and is currently trading around $84.78 a barrel.
The growing expectations for seeing a third round of stimulus gave a boost to shares and put downside pressure on the dollar.
The dollar index, which tracks the dollar movements versus a basket of major currencies, edged down to a low of 73.90 compared with the day's opening level of 74.22, reaching the high of 74.27 and is currently trading around 73.98 giving another impetus to oil.
Crude oil fluctuated today ahead of the Fed’s Chairman, Ben Bernanke as his speech will be the main focus today 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.
Investors also today are waiting for growth data during the second quarter and expected with downside revision, which supports all expectations that Bernanke will adopt new QE3 and after clear signals from the U.S. economy losing momentum to continue the process of economic recovery in the coming period.
In the meantime, there are several factors affecting the markets in addition to Bernanke’s speech, also the Hurricane Irene is expected to arrive in the east coast of the United States and the extent on which the oil markets will be affected, especially that we have seen its significant impact on gasoline prices pushing it to the upside on fears that production will be disrupted.
Despite the rise in oil prices seen this week, oil prices may face some bullishness from the expected restoration of oil production from Libya after the dominance of revolts on the Capital Tripoli, announcing the end of the 42-year rule of al-Qaddafi.