|News||Oil pressured lower after Bernanke’s comments|
|Analysis||Oil fell today, as the dollar rose after the Federal Reserve on Wednesday cut its growth expectations for the world’s biggest economy, and Chairman Ben Bernanke gave no signals of any further stimulus, which was reflected negatively on most commodities from gold to oil.|
Crude oil opened today at $94.44 recording the intraday high at $94.47 a barrel and the low of $93.99 a barrel and is currently trading around $94.10.
The USDIX rose today recording the intraday high at 75.16 after it opened at 74.86, recording its lowest at 74.77 and is currently trading around 75.05 amid rising haven demand on the jitters over the outlook for the global recovery and downbeat view from the Feds.
Bernanke yesterday was generally downbeat and raised the alarm over the nation’s growth. The new projections were dire, with growth revised lower and unemployment to slow only gradually, while price pressures have picked up slightly. The FOMC kept the benchmark interest rate unchanged between 0.00% and 0.25%, which was highly expected so it can support the weak economic conditions, yet the growth expectations that were gloomily still did not pressure the Feds to signal more stimulus to support the recovery.
The fed expect that the economy will grow between 2.7% to 2.9% this year, down from the previous expectations range of 3.1% to 3.3% in April. It also cuts its 2012 growth forecast to a range of 3.3% to 3.7%. Central bankers raised their forecast range for the unemployment rate to average 8.6% to 8.9% in the fourth quarter of 2011, compared with the expectations of 8.4% to 8.7% in April.
Oil will also remain pressured by because of the uncertainty surrounding Greece and the euro zone, as Europe kept the pressure on Greece to push forward with a tough austerity program, and Angela Merkel the German chancellor said Greece must more aggressively privatize state-run firms and boost task revenues. And she also said that the confidence vote was an important step, but Greece must now push through the reforms in order to get the approval for the next bailout tranche.
Today the markets are waiting for data on the labor market with teh weekly jobless claims,= which are expected to remain unchanged around 414 thousand from the previous week's 415 thousand,and new home sales are expected to drop from 323 to 310 thousand, searching for signs of how the broader economy is faring with the final estimate of the nation’s first quarter real GDP due on Friday.