Analysis Crude oil declines at the beginning of the week’s trading after the European finance ministers failed to ease investors’ fears over Greece, as the meeting ended without any progress about the European debt crisis unlike the expectations that the ministers will ease the markets fears with more right decisions over the crisis, which made investors disappointed.
The European continent continues being the main focus for investors asking themselves whether it will get over the crisis or it will sink in its debts, yet investors remained unsatisfied about Greece situation and whether it will avoid default or not, as the EU officials’ meeting has spread uncertainty among investors and intensified concerns over a Greek default, which made crude future uncertain and dark amid expectations that the future demand on oil will drop as debt crisis affects growth.
OPEC’s secretary said today that the current global demand on oil is growing slower than expected, which assured that European debt crisis and the slower pace of global recovery has affected the demand on crude oil.
Crude oil opened the week’s trading with a gap below last week closing, as it opened the session at $87.22 and reached so far a low of $86.51 and a high of $87.44, as it is currently trading with a downside momentum at $86.58.
Investors are awaiting for a optimistic decisions from the United States to relief the markets, as this week the federal open market committee will hold their monthly meeting where expectations to announce further stimulus in markets to support the slowing pace of growth and to push employment to the upside after the sector showed bad performance.
The FOMC meeting is the biggest mover for markets this week, as investor are awaiting for any upbeat data that may ease some of the fears over the global recovery that lost momentum in last period amid deepening debt crisis in Europe and slowing growth in U.S., which as a result affects the demand on oil.
On the other hand, we saw the U.S. dollar soared at the beginning of this week, as demand increased on it calling it as a safe haven amid uncertainties that dominate the sentiment, which put more down pressures on crude and push it to the downside, as USDIX opened the week’s trading with a gap for the upside at 77.00 and reached a low of 76.93 and soared to a high of 77.23, where it is currently trading at 77.10.
The scarcity of fundamentals around the world will cause some fluctuations in markets and make volatility appear on charts amid investors’ fears over the European continent as it may experience a Greek default over the coming period.