|Previous||-1.0 million barrels|
|Forecast||1.0 million barrels|
|Analysis||Oil surged for the sixth straight session boosted by weaker dollar and optimistic stocks. Crude prices breached $75 a barrel, recording its highest level in 12 months on improved outlook.|
Meanwhile, there is optimism in markets after the data released from major economies suggesting that the worst economic recession since WWII is finding a bottom. However, oil was waiting for stronger clues to continue its rally which happened yesterday after the release of the API weekly report that showed that U.S. stocks dropped 172,000 barrels the previous week, higher than estimates of 700,000 barrel incline. A confirmation may occur with the release of the EIA report that will be released today at 15:00 GMT.
Furthermore, what is supporting the outlook is the buoyant earnings recorded by large companies. JPMorgan Chase & Co. reported better-than-expected profits in the third quarter. Other U.S. companies will release their earnings this week with expectations to show improvement.
The upbeat earnings along with the cheerful economic data are putting downside pressure on the U.S. dollar which fell to its lowest level in 14 months against a basket of major currencies and is continuing its downside trend. The dollar index, which tracks the dollar movements versus six major currencies slipped today to 75.30 compared with the opening at 75.43. The dollar's depreciation is increasing the appeal of dollar-denominated commodities, especially gold and oil.
On the other hand, global equities extended their gains as Dow Jones surpassed 10,000 points for the first time since a year. In Asia, the MSCI Asia Pacific Index gained 1%, while Nikkei Index in Japan closed at the highest level in three weeks. The rise in global shares is boosting demand on energy products. Oil prices added 1.6% this week and more than doubled since reaching its lowest level below $34 a barrel.
Now, oil is traded at $73.50 recording a high of $75.92 and a low of $75.22, whereas the contract on Wednesday augmented $1.03 closing at $75.18, while recording a high of $75.53 per barrel and a low of $74.40 per barrel. Currently, oil is facing a resistance at $76.70 while gaining support at $73.35.