NewsCrude oil is extending yesterday’s losses
AnalysisCrude oil dropped today, extending yesterday’s losses, as investors are cautious while awaiting the results of the stress tests on European banks and also after Standard’s & Poor’s threat to downgrade the AAA US credit rating following Moody’s move, in addition to that investors are waiting for the US economic fundamentals later in the day to provide further trading clues and also the European banks stress test results.

Light sweet crude oil opened today at $95.86 a barrel recording the intraday high at $96.33 a barrel and a low of $95.28 a barrel and is currently trading around $95.44 a barrel.

On the other hand, the dollar rose after yesterday’s unexpected data from the U.S., that showed a slight improvement in the economy; in addition, the Feds showed that there is no need for another round of quantitative easing, which supported the dollar to rebound after the heavy losses recorded, forcing commodities and metals to trade lower today, spreading losses across the board.

The USDIX opened today at 75.20 recording the highest at 75.41 and the lowest at 74.96 and is currently trading around 75.40.

After Moody’s decision on placing the US credit rating under review Standard & Poor’s Ratings Services followed Moody’s as it may cut the US AAA credit rating saying that there is growing risk of policy stalemate on the agreement to raise the debt limit.

In Europe, in Europe the debt crisis is deepening, where the European finance chiefs came to no agreement regarding Greece, especially after the IMF said that it’s not ready to discuss a new rescue package for Greece, and the country should focus in the moment on implementing the austerity measures and the possibility of applying more measures.

Volatility and European market tensions are seen in the markets as today the focus will be on the EBA and the 2011 European banks Stress Tests results s for 91 banks in 21 European countries that account for nearly 65% of the continent’s banking assets as it’s expected to show the reality in the financial sector as the test is harshed and with an improvement from the past year. Volatility and fluctuation will dominate the market today awaiting the results of the critical test.

In the US, today the industrial production will be released and a growth of 0.3% is expected following the previous growth of 0.1%, and if the actual came in line with expectations that means that growth in the US is holding which will ease the growth woes in the world’s largest oil consumer.