NewsPreviousForecastAnalysisCrude dropped this morning below $74 per barrel due to the effect of the dollar's rise to its highest levels in more than a year, as confidence levels in financial markets plunged due to renewed fears regarding the European continent's debt crisis.
In addition, crude contracts fell for the fourth consecutive day subsequent to the euro versus dollar plunging to its lowest levels in 14 months, over renewed fears regarding the debt crisis spreading throughout other countries; thus, pushing investors to abstain from purchasing commodities.
Meanwhile, uncertainty is still overshadowing Europe as many witness that the aid package worth 750 billion euros that has been offered by the EU is not enough to contain the chaotic debt problem and prevent it from seeping into other countries. These fears persist throughout markets despite of the Europe economy's attempts to reduce the general budget deficit in the euro zone.
Furthermore, the Spanish government, headed by PM Jose Luis Rodriguez Zapatero, decided to put into effect reductions in the budget deficit with announcing investment cuts worth six billion euros; reducing public wages by 0.5% after European demands regarding taking all the necessary steps to reduce the budget deficit, although the EU is strongly seeking to assist the Europe economy up from its already fragile state, such as the Spanish, Portuguese and Greek economies which have taken steps into facing the ever-expanding deficit.
Moreover, the Portuguese government is attempting to reach a deal regarding taking additional steps totaling 2.00 billion euros regarding reducing the current 2010 budget deficit to avoid falling into a crisis similar to Greece's. In addition, Greece and Spain are also attempting to revive market confidence while balancing reducing their deficit woes.
Crude opened yesterday around $75.45 recording its highest around $76.40 and lowest around $73.60, where it managed to close around $73.80 per barrel.
The S&P GSCI index closed at 521.81 after plunging by 13.86 points; whereas the RJ/CRB Commodity index followed and dropped by 3.65 to close around 267.95.
As for NYMEX as of 02:45 EST; motor gasoline recorded $218.500 per gallon down by $1.010; heating is trading around $213.310 per gallon after gaining by $0.120; whereas natural gasoline plummeted by $0.005 to record $4.334 per 1000 cubic feet. In London, Brent fell by $0.240 to record $79.870.
Crude opened today around $73.90 recording its highest around $74.10 and lowest around $73.55, while it currently trades around $73.75 per barrel.