NewsEIA ReportPrevious1.6 Million BarrelsForecast1.3 Million BarrelsAnalysisThe market returned to the upside power and the sentiment turned positive sparking oil gains for the second consecutive day as the contract leaps above $108 per barrel once again.
Crude oil futures traded higher in Asia today and remained strong into the European session on improved risk appetite and upbeat expectations on demand amid the ongoing global recovery. Crude oil futures for June settlement traded higher by 0.95% at $109.31 per barrel recording the high of $109.34 and the low of $107.95 per barrel.
Oil is building on yesterday’s gains after the sentiment was bolstered by positive data which helped the market reverse higher. The June futures yesterday added 59 cents to end at $108.28 per barrel.
The market is upbeat after the manufacturing figures from Europe and housing data from the US which sent the market bulls to gain grounds. Good earnings from companies set even a stronger positive tone for the market and helped crude move higher.
Intel Corp supported gains in Asia today after the company projected quarterly sales that may top expectations. While Johnson & Johnson reported better than expected results among others, all supporting the positive recovery outlook and in return demand on crude to remain resilient.
The dollar was also a strong contributing factor as greenback continued to weaken burdened now with the risk appetite, feds monetary easing, and S&P’s outlook downgrade on credit rating which increased debt woes for the nation.
Today the dollar index that tracks the performance for the federal currency against its six major counterparts slumped heavily for the second day, erasing the early week gains. The index is trading at 74.74 recording the intraday opening high of 75.08 and the low of 74.72.
The market remains positive for now, especially with more strong housing data from the US today following the housing starts report yesterday. The sentiment is fragile and the market will fluctuate heavily but our eyes will be on the marginal $108.70 where intraday four-hour stability above this level signals the resumption of the upside move with confirmation above $109.75 per barrel.
More volatility and fluctuation will be seen and the US data will be essential especially the EIA report. The API said yesterday that crude stockpiles rose 667,000 barrels last week ahead of the EIA report today expected to show 1.3 million barrel buildup in crude inventories. Nonetheless, the focus remains on gasoline inventories and a drop reported today following the 1.8 MB drawback reported yesterday by API will help crude sustain the gains.