NewsOil trading below $75 on stronger dollar and softer sentiment PreviousForecastAnalysisOil retreated below $75 during the early session pressured by the appreciating dollar and the jittery sentiment after Chinese equities drove the region’s markets lower.
Crude oil Futures for August settlement declined by 0.36% affected by the decline in Asian shares which was pressured by China’s confirmations of keeping its lending curbs policies, which ignited fears over the outlook for the recovery. The market is jittery regarding the debt crisis, especially as investors await the results of the stress tests from Europe which will indicate the extent of damage in the financial sector which comes at the time of the earnings season, where investors are already fearful that the second quarter was harsh on businesses and it might hint further slowing signals for the latter half of the year.
Surely the earnings season now is the final chip in the house of cards, where if it tilted slightly on the top of the fear pyramid, were then nothing can stop the new round of turmoil in the market. The start so far was not bad with Alco, the largest US producer of aluminum, reported second quarter profits that beat analysts’ estimates as higher metal prices boosted sales. This week we still have more strong earnings on the waiting list from the likes of Intel later today and others this week from Google, BofA, JPMorgan, General Electric and others.
Oil has been hovering around $75 since the beginning of the year on the recovery expectations from the worst crisis since the Great Depression. The signs from emerging nations like China and India supported lift commodities on compensating demand for developed nations; nonetheless, the positivity started to evaporate with the days role and the unfolding of the European debt crisis which weighed heavily on the growth outlook and accordingly on the sensitive growth commodity, crude oil.
Crude futures yesterday opened at $76.25 recording the highest of $76.35 and the low of $74.52 to end trading with losses at $75.00 per barrel.
Meanwhile, the S&P GSCI ended yesterday at 494.67 down by 6.09 points while the RJ/CRB declined 2.22 points to settle at 258.40.
Crude futures opened today at $75.05 recording so far the high for $75.35 and declined towards the lowest set at $74.32 and currently trading around $74.40 per barrel. On NYMEX as of 04:42 EST, Motor Gasoline declined $3.50 to $201.92 per gallon, while heating oil trading around $198.15 down $0.98. Natural Gas added 0.024 to $4.412 while in London Brent traded softer around 73.79.