NewsCrude heads to the upside this morning supported by China and AustraliaPreviousForecastAnalysisCrude contracts this morning rose to stabilize trading above $74 per barrel, supported by increasing expectations regarding the economic summit for the heads of the European Union which starts today. Expectations are for the leaders to conclude the meeting with effective support and measures to tackle the budget deficit crisis in Greece.
Asian shares advanced today, after the drop in Chinese CPI ease fears over further Chinese monetary tightening, while the drop in Australian unemployment supported optimism further.
On the other hand, crude prices managed to support the French – German plan in bailing out Greece by reducing the budget deficit; a summit is scheduled to take place today, where the heads of the European Union are to meet in Brussels, joined by Jean-Claude Trichet to discuss several issues ranging from improving the area’s competitiveness, the economy and also highly expected to discuss means to support Greece and nations battling raging deficit problems.
Global stock markets declined throughout the previous period, due to the effects of the Greek deficit that had led to heightened fears regarding the government's capability to repay their debts; therefore putting in danger of returning to the cycle of an economic crisis. This negative effect has clearly reflected on oil prices, which has receded last week below $70 per barrel.
The S&P GSCI index closed yesterday at 494.06, after recording gains by 3.91; whereas the RJ/CRB commodity index also recorded gains by 1.11 to close at 266.23.
As for NYMEX, as of 03:30 EST; heating contracts rose to record $195.210 per gallon by $0.520; motor gasoline is trading around $193.350 per gallon after rising by $0.450; whereas natural gas contracts also gained by $0.033 to record $5.325 per 1000 cubic feet. In London, Brent contracts rose by $72.780 to record $72.780.
Crude contracts opened today at $74.57 per barrel, recording its highest at $75.05 and lowest at $74.55 per barrel, currently trading around $74.80 per barrel.