|Analysis||Crude oil slightly changed today close to $78 a barrel after yesterday's surge when prices gained 1.5% on stellar global manufacturing data which revived hopes that world economies are abandoning the worst recession since WWII.|
On Monday, the data showed that China's manufacturing rose to the highest in 18 months; in the euro zone it spiked to 21 months high, while showing expansion in the U.K., and finally it reached 3-year high in the U.S. The optimistic data spurred demand on higher-yielding and risky assets.
Stock markets gave another boost to oil prices the previous day as U.S. equities bounced after the buoyant U.S. manufacturing, housing, and construction figures as well as the better-than-expected profits by Ford Motors. Conversely, most Asian stocks slipped today on worries with regard withdrawing stimulus plans which may impact economies adversely. Oil contract on Monday added $1.13 closing at $78.13, while recording a high of $78.66 per barrel and a low of $76.56 per barrel.
Currently, oil is traded at $77.97 recording a high of $78.42 and a low of $76.55 ahead of the release of the American Petroleum Institute report later on today and the Energy Information Administration tomorrow which are expected to show what happened to U.S. inventories last week.
In the currency market, the U.S. dollar inched up after yesterday's drop as optimist encouraged investors to damp lower-yielding assets. It seems that the U.S. dollar will continue its upside correction after reaching 14-month low versus a basket of major currencies. Meanwhile, despite the pleasant data, there are uncertainties with regard recovery with talks about withdrawing stimulus packages which may show that recovery is still too far to be reached.