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AnalysisCrude oil surged today above $72 a barrel on global optimism after the improvement witnessed recently showing that the worst is over. As global economies improve, the demand on oil is expected to soar. Oil after declining to $66 levels at the beginning of the month it managed to breach $72 levels, especially as the U.S. dollar plunged against majors last week before rebounding again on Friday.

 

The U.S. dollar slipped to the lowest level versus a basket of major currencies to 14-month high. However, it succeeded in doing an upside correction on Friday. Currently, the dollar index, which tracks the dollar movements versus a six major currencies, is at 76.63 compared with Friday's closing at 76.42.

 

On the other hand, U.S. stocks bounced on Friday on better-than-expected profits by Alcoa Inc., but Asian stocks retreated today. Meanwhile, there is confidence in the economy; Ben Bernanke, the chairman of the FED, announced that they will tighten the monetary policy as soon as the economy show improvement, while Trichet mentioned that the European economy will recover gradually.

 

Now, oil is traded at $72.17 recording a high of $72.55 and a low of $72.05, whereas the contract on Friday added $0.08 closing at $71.77, while recording a high of $72.35 per barrel and a low of $70.62 per barrel.