|Previous||-7.3 million barrels|
|Forecast||2.0 million barrels|
|Analysis||Crude oil is trading within a tight range after it soared yesterday due to improvement in the investors’ sentiment, as European leaders has worked hard in order to calm global markets by intending to take actions to prevent the crisis from spreading to other European countries.|
Fears and concerns remain evident in markets but it retreated due to leaders’ actions, as concerns over a Greek default have started to eased after the Greek parliament approved the property tax increase in order to get the sixth tranche from last year’s bailout, also, the Greek prime minister assured investors that his country is not going to default.
Mixed sentiment is evident among investors, as deepening debt crisis in Europe and a slowing pace of global recovery are weighing down on markets, but on the other side, European leaders are taking tough measures to prevent contagion risk, as they are negotiating to extend the EFSF’s abilities and increase its leverage yet news of disagreement among them is fueling the mixed sentiment, and those contrarian factors are making crude trade within a tight range.
Crude opened today’s session at $83.72 and reached a high of $84.24 and recorded a low of $82.64, where it is currently hovering around $83.68.
Investors are looking for any data or decisions from leaders that may help markets gain some momentum, and the main focus remains the Euro Zone and how leaders will deal with the situation there, as this week, the German parliament and Finland will vote whether their countries approve on expanding the EFSF or not.
Rumors and expectation are heard about a possibility that the ECB would cut its benchmark interest rates by half point in order to support the pace of growth that seen slowing in the last period amid the deepening debt crisis that affects the economy, however, these expectations along with European chiefs have supported crude positively and pushed it to the upside despite the rising possibility of a Greek default.
Economist and analysts are afraid that the global economy is heading into another recession due to the fragile pace of global recovery and slowing growth among major economies, in addition to the deepening debt crisis in Europe, all these factors together are weighing negatively on markets.
Nonetheless, the U.S. dollar declined for the fourth consecutive day which supported oil and pushed it to the upside despite the deepening debt crisis. The USDIX opened today’s session at 77.76 and recorded a high of 77.94, then it retreated to reach so far a low of 77.50, where it is currently trading at 77.54.
Today the U.S. Energy Information Administration will release its weekly report, as it is expected to show a rise in U.S. crude stockpiles last week by 2.0 million barrels due to the decline in oil demand these days after it dropped by 7.3 million barrels the week before.
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