NewsCrude drops near $78 per barrel pressured by profit-taking following the sentiment reversalPreviousForecastAnalysisCrude fell today to currently stabilize around $78 per barrel after the ascend witnessed in the past few days, where this morning’s descend was pressured by the depressed sentiment n the market fueling profit-taking. Equities fell today as the bullishness that dominated markets yesterday from Chinese plans to ease the Yuan's peg to the Dollar faded.
Crude yesterday was affected by the drop witnessed in global indices after renewed fears in markets regarding the sovereign debt crisis in Europe and its expected negative effect it may have on the country’s growth.
On the other hand, Goldman Sachs today reduced its expectations regarding crude oil this year, due to the global economy’s median growth expectations for 4.9% this year. Crude expectations have been reduced throughout the first three months of this year to $87 per barrel, compared to previous expectations of $96 per barrel.
Moreover, crude futures gained to 78.924 yesterday due to support from the Chinese central bank’s statement regarding beginning to loosen up ties between the Yuan and dollar; thus helping support demand on crude. In addition, Societe Generale expects the Yuan to gain between 3 – 5% until the end of the pending year, where this ascend is expected to leave a negative effect on Chinese exports.
Meanwhile, demand on Chinese crude has skyrocketed and is expected to prevail as expectations keep increasing regarding the Chinese economic growth at a faster pace compared to other economies throughout the pending year with a median of 10% on an annual average.
Crude opened yesterday around $78.65 recordings highest around $79.92 and lowest around $77.70 per barrel, where it managed to close trading around $78.05 per barrel.
The S&P GSCI index closed yesterday around 512.83 after gaining 2.27 points; whereas the RJ/CRB index gained by 0.76 points to close around 263.69.
As for NYMEX as of 02:15 EST; motor gasoline fell to $213.540 per gallon by $0.740; heating is trading around $213.210 per gallon after dropping by $1.380; whereas natural gas also receded by $0.023 to record $4.850 per 1000 cubic feet. In London, Brent recorded a drop by $0.720 to record $78.100.
Crude managed to open today around $78.10 per barrel recording its highest around $78.65 and lowest around $77.50 per barrel, while it is currently trading around $78.05 per barrel.