NewsCrude moves higher Friday morning amid a mixed sentiment PreviousForecastAnalysisCommodities continued to be battered with the short term negative outlook, as investors see that the rally has stretched beyond the fundamentals, and with the downbeat signals of a slowing global recovery, the pressure remains evident amid high volatility.
Crude oil futures for July settlement moved slightly higher to hover around $99.31 a barrel recording the high of $99.48 and the low at opening levels of $98.93 a barrel.
The contract is trading higher after it reversed lower yesterday to settle at $98.92 a barrel from the opening levels of $100.18 and the highest recorded in the session at $101.22 a barrel. The market remains sensitive to economic data, and especially from the U.S. economy.
Yesterday the leading indicators contracted in May, the first drop since June, which signals slowing outlook for growth over the next three to six months. Existing home sales also fell unexpectedly and manufacturing activity slowed drastically which depressed crude gains on fears over the outlook for demand, which remains fragile to a shaky recovery.
Today, the contract is moving higher in correction to yesterday’s drop which was deemed excessive, as investors see the drop in the weekly jobless claims as a good indication for the recovery in the U.S. The overall outlook for commodities and for crude remains certainly bullish, yet for now, the sentiment is rather mixed and biased to the downside as the excessive rally for commodities and especially crude has fueled inflation pressures and threatens to cripple the global recovery.
The International Energy Agency said yesterday on Thursday that the rising costs of fuel threaten the global growth and might slow the recovery. This outlook highlights the sentiment for crude and commodities, as investors are likely to sell on spikes for now rather than buy on dips until more solid fundamentals are seen to assure the outlook for global growth remains intact and the economy will pickup pace into the third quarter once again.
With the lack of major fundamentals today the focus remain on the prevailing sentiment and end of week trading as investors square their positions ahead of another hectic week with growth figures and more signs over the outlook for demand.