|News||Crude drops below $82 on rising fears over the Greek debt crisis|
|Analysis||Crude dropped in the morning session below $82 per barrel after the dollar ascended against the euro, due to fears surrounding the debt-ridden Greece. It influenced investors to put off purchasing commodities, as the dollar gained grounds.|
The dollar rose against the euro after hopes diminished regarding EU providing a rescue plan to aid Greece in its fight against the highest budget deficit in the EU. Fears escalated after Germany said that Greece maybe heading for the IMF for support. In response, Greek's PM George Papandreou released a statement that they are willing to give the EU a week to come up with the details regarding the previously promised rescue plan in the awaited EU leaders’ summit next week.
Meanwhile, instability seems to be overwhelming financial markets in the current period, where global economies are trying hard to recover from the recession that had been caused by the worst credit crisis since the Great Depression. However, during the course of struggling several obstacles are appearing and reducing confidence levels, especially since the market’s concentration is set on the budget crisis in Greece as increasing fears of the negative data is negatively affecting the deficit levels.
Oil prices were supported by the Dow Jones Average last week, where it recorded levels near $83 per barrel and the highest since 11 weeks. Equities and oil prices are closely correlated and so when confidence levels rise it supports stock markets, which then affect crude prices to ascend.
The S&P GSCI index closed the evening session recording 529.38 after it dropped 2.82 points; whereas the RJ/CRB commodity index stabilized to close unchanged at 275.68.
In NYMEX as of 03:44 EST; heating futures were trading at $211.200 per gallon down by $0.710; motor gasoline is trading around $230.050 per gallon after plunging by $0.040; whereas natural gas also dropped by $0.001 to record $4.084 per 1000 cubic feet. In London, Brent receded by $0.240 to record $81.240.
Crude opened today at $82.10 per barrel and recorded its highest of $82.15 and lowest of $81.70 per barrel, where it is currently trading around $81.77 per barrel.