|News||Crude oil drops on a stronger dollar|
|Analysis||Crude oil futures fell today in the Asian session due to the strengthening dollar and the continued fears regarding the sovereign debt crisis in Greece, which caused oil to fall after last week's rally.|
Light sweet crude oil opened today at $94.89 a barrel recording the high at $95.17 a barrel and the low of $94.32 a barrel and is currently trading around $94.51 a barrel. Brent oil for August settlement fell to $111.18 a barrel.
Oil prices were pressured by a stronger dollar which rose against a basket of currencies, making oil more expensive when purchased in foreign currencies. The USDIX opened today 74.25 recording the highest at 74.60 and the lowest at 74.20 and is currently trading around 74.53.
After the euro area finance ministers approved their part of the July tranche for Greece, jitters eased slightly over the prospects for default; nevertheless, it was tempered by Standard & Poor’s view on the private sector involvement in a second Greek rescue package, adding that the proposed debt rollover plan for Greece may still put the country in effective default.
Adding to the market concerns are signs of slowdown in the second largest oil consumer China after data issued last Friday showed that the country’s factory grwoth slowed, data also showed that the services sector expansion fell slightly in June. As for the largest consumer of oil, USA, investors will be watching the key US non-farm payrolls report next Friday for signs of the recovery pace in the U.S. economy.
The U.S. oil inventory data from the American Petroleum Institute and the government department of Energy will be delayed by a day to Wednesday and Thursday, due to the U.S. holiday yesterday, as they celebrated the Independence Day.