NewsCrude oil trending south on news of a cease-fire in Libya PreviousForecastAnalysisCrude consolidated its gains trading today around $113 per barrel in the Asian session, yet started the southern trip in the European session on news of a cease-fire in Libya. The dollar remained weak and investors’ jitters prevail over the unrest in the Middle East and especially Libya.
Crude oil futures for May settlement opened today at $113.28 recording the high of $113.44 and the low of $112.15 per barrel, and currently hovering around $112.48 and trending south.
On Friday, crude ended the week at $112.79 per barrel with a strong $2.49 gain or by 2.26%; ending on the fourth straight weekly gain.
The dollar continues to trade with its consistent fragility against its major counterparts, and especially the euro that was bolstered by Thursday’s ECB decision to raise rates which pressured the euro to its highest in 14 months versus greenback.
The euro’s gains, the dollar’s weakness, and the Middle East tension all supported crude’s rally that extend to the highest in 30 months, the peak recorded since September 2008.
The tension in the Middle East was the biggest support for gains especially as investors focused on the developments in Libya and intensified fighting around crude supply areas. The intensified operations diminished hopes last week for the NATO efforts to bring the crisis to an end and supported crude’s weekly gain of 4.5%.
Nevertheless, we can see the downside correction starting today after reported news that Libya leader Muammar Qaddafi has accepted a cease-fire with rebels. Oil dropped into the European session today and trending south still on the news as investors assess the impact of the move and its credibility.
As for Brent, it also trended south this morning to drop by at least 0.58% or $0.73 to $125.92 per barrel.