|News||Crude hovers above $80 in the Asian session|
|Analysis||Crude traded this morning above $80 per barrel, following yesterday’s surge which was supported by the better than anticipated ADP and services figures, which was accompanied by an upbeat Beige Book report. That was at the time Obama continued to rally support for this health care initiative taking a little heat off his proposal on limiting risk taking by financial institutions.|
Crude contracts rose in the US session to record their high around $81.20 per barrel, after the industrial sector gained strong activity in most regions in the US, specifically technology tools, cars, and mining tools as indicated by the Beige Book.
The EIA weekly report released yesterday, showed a rise in oil stockpiles by 4.1 million barrels; compared to the previous 3.0 million barrels, and higher than expectations of 1.4 million barrels, where crude stockpiles are at 341.6 million barrels and above their medium term for this time of year. On the other hand, motor gasoline gained by 0.7 million barrels last week and are still above their medium term average; distillate fuel inventories that include heating oil declined by 0.9 million barrels and still above the average.
The Greek President, George Papandreou, yesterday announced additional spending cuts totaling 4.8 billion euros to anchor their budget deficit; the move was welcomed by the markets as Greece was moving forward with their deficit cutting plans and aligning with EU demands which increased the likelihood for support and also eased fears over default by the nation which brought spreads lower.
Dear reader, overall economic data is supporting confidence levels in financial markets and therefore increasing expectations regarding oil prices stabilizing in the meantime around $75-80 per barrel, where future predictions are for prices to improve due to support from the global economies' growth and higher demand.
The S&P GSCI closed yesterday at 525.44 after gains by 6.87; whereas the RJ/CRB commodity index recorded gains by 2.58 to close at 277.71.
In NYMEX as of 02:15 EST; heating contracts recorded $208.280 per gallon for $1.090; motor gasoline is trading around $224.240 per gallon after receding by $0.520; natural gas also fell by $0.011 to record $4.476 per 1000 cubic feet. In London, Brent dropped by $0.0240 to record $79.010.
Crude opened today at $81.00 per barrel and managed to record its highest at $81.00 and lowest at $80.20 per barrel, while currently trading around $80.40 per barrel.