|Analysis||Crude oil for October delivery dropped today as the contract expires today which led many investors to take short positions. On the other hand, the new contract for November rose today as the U.S. dollar weakened against a basket of major currencies, increasing the appeal of the commodity as an inflation hedge.|
November's contract is currently traded at $70.46 recording a high of $70.67 and a low of $69.74. October's contract yesterday shed $2.08, recording a high of $72.15 and a low of $68.95.
The previous day, the data released provided evidence that the demand on oil is weak as one of the China's largest crude and gas producer announced that demand has weakened in the world's second crude consumer which caused oil prices to dip yesterday.
Meanwhile, the U.S. dollar retreated paring its previous gains in the last two sessions. The dollar index, a gauge of the dollar's strength versus a basket of major currencies is now at 76.19 compared with the opening at 76.73. The dollar's fall enhanced demand on dollar-denominated commodities. Today, there is lack of fundamentals from major economies which means that movements are going to be merely technical.
With regard to stocks, U.S. equities slipped yesterday, where S&P 500 plummeted from 11-month high. Dow Jones lost 41.34 points or 0.42% to close at 9778.86 points; S&P 500 shed 3.64 points or 0.34 points to close at 1064.66 points, while NASDAQ added 5.18 points or 0.24% to close at 2138.04 points. In Asia, shares advanced today where MSCI Asia Pacific Index augmented 0.7%.