|News||Oil prices little changed with mixed sentiment|
|Analysis||Oil prices were little changed this morning after reaching the lowest in the past four months. Oil’s decline prompted investors into bargain demand amid the mixed sentiment and rising equities, also crude rose ahead of the consumer confidence report today from the United States which is expected to gain slightly.|
Crude oil opened today at $90.80 a barrel recording the intraday high at $91.39 a barrel and the low of $90.43 and is currently trading around $91.20 a barrel.
Futures fell yesterday after consumer spending was reported flat in May; worse than the prior revised 0.3% and expected 0.1%, further confirming the sluggish state of the U.S. economy.
The USDIX index opened today at 75.30 recording the highest at 75.43 and the lowest at 75.15 and is currently trading around 75.24.
The consumer confidence index which assesses the consumers’ sentiment regarding business conditions, employment and personal income will be released today from the United States and is expected to improve slightly reaching 61 from the previous 60.8 the lowest in six months.
The major mover for oil will be the expected drawback in U.S. crude stockpiles according to the API report today by 1.5 MB. Refiners boosted gasoline output before the Fourth of July holiday, which is expected to support oil in an attempt to continue the upside move.
The president of OPEC said on Monday that he would be willing to call an emergency meeting of the group if the situation required it, those remarks came after a decision by the IEA Thursday to release emergency stocks which led to a sharp drop in the oil prices.
Returning to Europe, the Greek parliament started the three-day debate to vote on the austerity measures required by lenders, where concerns are slightly eased as it became obvious for everyone that the possibility of Greece to default is weakening due to the huge risk associated with this default and accordingly will be prevented as much as possible by leaders.
Further support to the sentiment is seen from the news of banks agreement to voluntary rollover Greek debt to participate in the second bailout, which is further soothing for jittery markets awaiting the vote.
The results of the vote will be released later on Wednesday or maybe Thursday, awaiting the European finance ministers to meet on July 3 in order to come up with a decision regarding a new aid package for Greece, in addition, handing the pending 12 billion Euros tranche of the last year’s bailout package in July.
Rising equities and signs of a rebound for commodities is seen today with the eased jitters and oil might be supported ahead of the upbeat API expected. High volatility will prevail today though with the upside support seen and the softer dollar crude has the likelihood to move to the upside.