NewsEIA Report Previous-0.4 Million Barrels Forecast1.4 Million BarrelsAnalysisCrude future contracts stabilized in Asian trading today below $75 per barrel, affected by the strengthening dollar against a basket of foreign currencies; investors are leaning towards purchasing the dollar and shunning risk amid volatility and pessimism that is haunting the market.
The euro retreated versus the dollar in morning trading to record 1.4050, compared to the gain it recorded last week around 1.4425. The euro declined versus the dollar and was echoed on oil as we know that the positive correlation between the euro and crude pressures their movement in tandem taken into consideration the dollar and common factor; nevertheless, this theory is commonly known in the market yet not granted as a solid fact.
Meanwhile, pessimism and low confidence levels are dominating financial market in the meantime, as the China said it intends to continue monetary tightening to restrain credit growth and prevent a formulating asset bubble. That is taken negatively by the market as it will have adverse affect on growth amid fragile global economic conditions.
As for today, we await the EIA report and it is expected to report a rise in inventory levels by 1.4 million barrels, compared to the drop recorded the previous week with 0.4 million barrels. Demand is still weak and inventories are already high in the world’s biggest consumer and that is overshadowed negatively on oil.
The S&P GSCI index closed trading at 500.00, down by 4.55 points; whereas the RJ/CRB commodities index recorded a decline of 2.86 points to close at 273.88.
In other NYMEX trading as of 02:25 EST; heating oil futures for March delivery were trading lower at $194.850 per gallon by $0.230; meanwhile, motor gasoline is trading around $196.800 per gallon after rising by $0.060; whereas natural gas contracts fell back by $0.010 to record $5.475 per 1000 cubic feet. As for London trading, Brent dropped by $0.18 to record $73.16.
Crude contracts for March delivery opened at $74.65 per barrel today, recording the highest at $74.85 and lowest at $74.45 per barrel, currently trading around $74.60 per barrel.