|News||Crude contracts around $78 per barrel supported by the weakening dollar|
|Analysis||Crude future contracts gained throughout the Asian session today, supported by the weak dollar, which reached the lowest levels in four weeks against the Japanese Yen. Meanwhile, investors are leaning towards selling the dollar as confidence levels in financial markets rise and thereby increasing demand on primary commodities; headed by oil.|
The euro versus the dollar inclined yesterday to record 1.4395, after recording levels near 1.4325; the euro’s appreciation was mirrored by oil, since we all know that both share a strong correlation coefficient and trade in tandem.
Chinese reports yesterday showed a clear improvement in yearly imports by 15% from the second largest oil consumer; signaling the beginning of the second phase in strategic crude oil reserves. This in its own role supports demand on oil from the largest industrial country.
From here, we can expect oil prices to stabilize around $75 per barrel throughout the present period, but we cannot neglect the fact that we are in the earnings season for the past quarter, which could seem mixed, coming in with better than expected results like Intel, when compared with Alcoa results; frustrating markets.
Currently, lights are set on the four quarter corporate earnings from year 2009, where its effects are clearly reflecting on stock markets that in the last period have been directly tied to crude prices; henceforth, any improvement witnessed in the results will support stock markets and therefore interpreted on crude prices in the end.
Meanwhile, heating oil contracts for February settlement declined by 0.29 cents to close at $2.04; as for Motor Gasoline it added only 0.3 cents to close at $2.05. As for natural gas it declined 10 cents to close at $5.59 per 1000 cubic feet. As for Brent it ended in London at $77.11 higher by only one cent.
Today, crude contracts opened at $78.18 recording the highest at $78.45 and the lowest of $77.80 and currently trading around $78.00.