|News||Oil continues the upside rally for third day on demand outlook|
|Analysis||Crude oil futures continued the move to the upside amid a strong risk appetite in the market and upbeat expectations for demand amid growth signals from major consuming nations, lead by the U.S economy.|
Crude rose to the high of $112.39 and now hovering around $112 leaving the low at $111.28 per barrel, extending yesterday’s 2.9% gain.
Crude is still supported by the positive risk appetite that engulfed the market since yesterday. The good housing figures from the US added to the upbeat sentiment and supported the rally to extend. Asian equities today trailed the upbeat wave of gains and drove commodities further higher with good earnings that bolstered the gains as the tech sector supported the rally on sustained demand outlook.
With the seen wave of optimism the dollar also supported oil’s gains with its continued southern journey. The dollar index extended yesterday’s drop and trended lower today from the high of 74.40 to the low of 73.86 and now hovering around 73.90.
The data from across major consuming economies, and especially the US, have been positive which helped offset the downbeat expectations for slowing demand on higher prices. Earnings are also better-than-expected which is supporting the gains.
Crude oil supplies yesterday were also further support for demand expectations from the biggest consumer. The EIA reported an unexpected drop in Crude supplies by 2.32 million barrels for the first time since February opposed to the expected 1.3 million barrel buildup. Also, gasoline inventories - the focus now with the summer driving season- dropped by 1.58 million barrels to the lowest since the week ending in November 12.
The week is coming to an early end today with the long Easter weekend and investors are seemingly heading out with a good optimistic sentiment and that is increasing the uncertainty further. More labor and industrial data are on queue from the US today with other earnings and that will keep the fluctuations seen as we think profit taking might be seen today with investors out tomorrow on Good Friday.