|Analysis||Crude oil edged down below $74 a barrel as the greenback is continuing its rally, eroding demand on the black gold as hedge against inflation.|
Oil prices fell 2% the previous day after Bernanke's announcements that the U.S. economy is still facing troubles despite the progress seen recently. Concerns with regard recovery in the world's top crude consumer are pushing prices to the downside. Probably the FED will keep interest rate low and stimulus in their meeting in December. Meanwhile, there are worries that global recovery is losing momentum as stocks retreated and yen and dollar strengthened.
U.S. equities showed a slight decline the previous day after Bernanke's speech, while most Asian shares fell today. The rally in stock markets has stopped, especially after the drop in Dubai shares. Currently, Dubai world is discussing with banks rescheduling its debts which are due on December 14.
On the other hand, the yen and dollar are showing strength as demand on them has increased as refuges. The U.S. dollar is continuing its rise that started on December 2 after falling to the lowest in more than 15 months against a basket of major currencies the previous week. The dollar index is currently at 75.80 compared with today's opening at 75.74.
Later on today, the American Petroleum Institute will release its weekly report to show change in demand on U.S. inventories in the prior week ahead of the EIA report tomorrow.
Oil is currently traded at $76.87 recording a high of $74.35 and a low of $73.52, whereas the contract on Monday shed $1.54 closing at $73.93, while recording a high of $76.10 per barrel and a low of $73.70 per barrel.