|Previous||-0.9 Million Barrel|
|Forecast||-1.5 Million Barrel|
|Analysis||Crude oil climbed today trimming some of the losses in the past two days, but still affected by many reasons yet a weakening dollar, China's GDP and expected drop in inventories is offseting the downside pressure of Moody’s Ireland downgrade and the API reported inventoeis buildup.|
Light sweet crude oil opened today at $96.63 a barrel recording the intraday high at $97.39 a barrel and a low of $96.49 a barrel and is currently trading around $97.38 a barrel.
The Dollar Index that tracks greenback’s performance versus its six major counterparts, dropped today affected by the easing fears after China reported good GDP figures assuring that the recovery momentum is sustained and the dollar is weakening ahead of Bernanke's semi-annual testimony on the economy and monetary policy which might signal new steps by the Feds to support growth, and hints for more QE will surely weaken the dollar.
The USDIX opened today at 76.01 recording the highest at 76.08 and the lowest at 75.75 and is currently trading around 75.78.
Fears of escalating euro zone sovereign debt crisis accelerated on Tuesday after Moody’s Investor’s Services cut Ireland’s credit rating to junk status by one notch from Baa3 to Ba1 due its overall weakened economic situation warning that it will probably need a second bailout which dragged the US shares to the downside. European leaders are supposed to meet for an emergency summit after finance ministers have realized for the first time that the some form of Greek default may be needed to cut Athens’s debts and stop the crisis from spreading to Italy and Spain.
Those fears were countered slightly as stocks and commodities rose on China's GDP, which helped oil move to the upside. China's annual GDP grew 9.5% in the second quarter above forecasts which eased worries over the pace of growth and supported crude as China is oil's second biggest consumer.
The EIA report will be issued later today at 10:30 am EDT (14:30 GMT), where is expected to show a decline in the crude oil inventories by 1.5 million barrel from the previous decline of 0.9 million barrels which is also supporting oil recover some of the losses seen in the past sessions and offset the downbeat API report yesterday.
API weekly oil inventory report yesterday showed that crude stocks rose 2.3 million barrels in the week to July 8. While gasoline stocks fell 1.6 million barrels and distillate stockpiles rose a whopping 4.8 million barrels.