NewsCrude oil rises after announcing the results of the European leaders summit
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AnalysisCrude oil rose today as the market sentiment has been bullish since yesterday on the back of easing worries about debt problems in the U.S. and Europe after the euro leaders reached a deal regarding the aid package for Greece yesterday, and signs of progress on a deficit reduction in the U.S. also supported oil further, in addition to the weakening dollar which pushed oil to the upside.

Light sweet crude oil opened today at $99.14 a barrel recording the intraday high at $99.81 a barrel and a low of $99.10 a barrel and is currently trading around $99.45 a barrel.

The dollar today climbed slightly in an attempt to trim the losses of the previous sessions, but its still considered weak and trading at low levels especially as the Euro-Zone introduced more stimulus to ease the debt crisis, which is a positive step for the global economic recovery.

The USDIX opened today at 73.93 recording the highest at 74.16 and the lowest at 73.88 and is currently trading around 74.06.

After the long period of waiting for the final decision, measures were announced yesterday by euro area leaders to prevent contagion effects to engulf other euro-zone nations. As they approved to give Greece 159 billion euros in new aid (109 billion from the euro area economies and the IMF and the remaining 50 billion will be funded by financial institutions), while the rescue loans maturity will be extended to 15 years from 7.5 and the interest rate will be lowered to 3.5% from current levels between 4.5% and 5.8%.

Moreover, the European Financial Stability Facility (EFSF) scope will be expanded, and will be allowed to provide credit lines for struggling nations. Also, the fund will be allowed to loan governments to recapitalize banks and to intervene in the market if the ECB sees necessary and buy bonds in the secondary market. Those measures may ease the tension in markets in the short run, but worries may return as rating agencies will consider the second bailout for Greece as a temporarily selective default with the bond buybacks to ease the debt burden. 

In the United States Negotiations between Democrats and Republicans continue over a possible deal that will raise the debt ceiling and reduce the swelling deficit in the United States, where president Obama seems to have eased his stance on raising the debt ceiling temporarily to avoid a default by the United States, since Obama demanded that any deal to raise the debt ceiling should also include a long term plan to reduce the deficit.

As Aug. 2 deadline to raise the U.S. debt ceiling nears, President Barack Obama and the senior Republican in Congress, John Boehner, worked towards a budget plan that might include deep spending cuts but might leave tax reform for later, Congressional aides said yesterday.