NewsCrude nearly flat in Europe after losses in Asia PreviousForecastAnalysisCrude oil was hovering around opening areas in the European session recovering some of the losses endured in the Asian session as markets return from the Easter Holiday and focus on the Feds decision tomorrow.
Crude is currently hovering around $112.07 a barrel recovering from the intraday lows recorded at $111.10 per barrel and below the high at $112.21 around opening levels of $112.20 a barrel.
Fears over the excessive gains for crude are starting to be evident in the market and not only affecting economies and monetary policies, yet also triggering the uncertainty for producers. Crude was pressured lower with comments from the top oil exported Saudi Arabia, where they are unhappy with rising prices and their impact on the global economy according to chief of state oil firm Aramco’s comments, Khalid al-Falih.
Al-Falid told an industry gathering in Seoul We are not comfortable with oil prices where they are today...I am concerned about the impact it could have on the global economy, fueling jitters over possible move by Saudi to increase supply to cool prices.
Investors are already curtailing their risky positions ahead of the FOMC rate decision tomorrow as the Feds start their meeting today. The sentiment is mixed over the prospects for the feds move, whether cutting back quantitative easing is a good signal or is growth certainly slowing with rising inflation as Bernanke is expected to provide the new growth and inflation projections and some see downside pressure on the growth outlook.
Despite the fact that a change of rhetoric from the Feds is highly unlikely, accordingly the projections will be watched closely. The market is mixed over the outlook for growth and monetary tightening which might slow the recovery and accordingly demand on crude that rallied beyond that reasoned with the market fundamentals and adequacy of supply and demand.
So far, crude recovered from the lows at $111.10 and stability above this marginal support keeps the bullishness favored, while stability below it will extend the downside correction. Now crude is trading above $111.45 per barrel and stability above this level will likely push crude higher once again towards $113-115 a barrel.