|News||Crude higher reversing Monday’s losses|
|Analysis||Commodities found the support to move higher once again on bets for more bullishness which eased the jitters over the selloff and the end of the rally with Goldman Sachs back bullish!|
Crude oil futures for July settlement were trading bullishly this morning recovering from the heavy losses that started the week. Crude futures are currently trading around $98.72 a barrel recording the high of $98.89 a barrel and rising off earlier lows of $96.61 per barrel.
Gains are seen for oil this morning, rebounding from the heavy drop on Monday by $2.40 to settle at $97.70 per barrel on rising tension in markets over the outlook for the global recovery and deepening debt crisis in Europe.
Commodities found support from easing dollar and jitters over the European debt crisis and also the return of the bullish outlook for the market. Goldman Sachs that turned negative on commodities last month and recommended exiting the market returned now with bullish outlook and recommended buying oil, copper and zinc on the outlook for sustained growth and will increase demand on commodities.
Morgan Stanley also propped their oil forecasts on the ongoing tension in the MENA and fighting in Libya that will cut supply. The fear is once again over the adequacy of the supply and for OPEC to compensate for the drop in supply from Libya, that according to the cartel Libya’s exports slumped 79% in March from the previous month as the unrest continued to intensify and crippled output.
The volatility in markets eased with Greece adopting new budget cuts of 6 billion euros and accelerate asset sales to meet the pledges last week to the EU and IMF, which slightly subdued fears over the capability for the nation to get assistance and avoid restructuring.
High volatility prevails today with more fundamentals amid choppy trading and correction. The dollar already started to correct some of the heavy bullishness seen on Friday and Monday which supported crude. The dollar index is trading bearishly now around 76.05 off the high of 76.35 and above the low of 75.95.
Germany’s strong 1.5% expansion in the first quarter was unrevised ahead of more confidence figures from the nation and housing data from the U.S. which shall keep the volatility seen for crude and likely remain biased to the upside ahead of the expected drop in inventories to be reported today and tomorrow from the United States.