NewsCrude slightly higher correcting yesterday’s slump ahead of US GDP PreviousForecastAnalysisCrude oil futures for March settlement advanced on Friday following the strong decline which supported the gains on speculative demand as well as prospects for recovery ahead of the US GDP today expected to show accelerated expansion in the past quarter.
Yesterday the market was pressured down as investors priced in the unexpected increase in crude stockpiles as the EIA reported on Wednesday, while Standard & Poor’s credit rating cut for Japan affected the market.
Also, yesterday durable goods orders were weak and the jobless benefits rose which dampened the sentiment, yet the focus today shifted to the GDP from the US which uplifted the sentiment early in the morning.
The dollar is trading strong against its major rival ahead of reports today to show growth accelerated in the fourth quarter at 3.5% annual pace up from 2.6% in the third quarter.
The volatility is expected to remain high with the dollar and stocks trading with heavy fluctuations with the data, especially as the sentiment from Asia was downbeat as the market acted on the S&P cut for Japan’s credit rating. We have scheduled earnings to be reported from the S&P today like Chevron Corp.
Brent futures also traded higher today reaching $97.84 per barrel, adding 0.46% or $0.450 per barrel. March crude contracts fluctuated and currently trading higher at $85.59 after recording the low of $85.10 and the high of $85.68 per barrel.
The dollar index did not heavily dampen oil which is correcting yesterday’s heavy drop and expected to reverse still to the downside today as the dollar holds its grounds, unless the GDP proves to be good support for Crude to continue the gains. The dollar index is currently hovering around 77.80 areas recording so far the low of 77.66 and the high of 77.94.