|News||Crude falls at the end of this week|
|Analysis||Crude oil declined since the beginning of today’s session as concerns over slowing growth and the ability of European leaders to contain the crisis from spreading returned after Germany approved expanding the EFSF, as now the market speculates the next move. |
Crude opened today’s session at $83.08 and reached a high of $83.20 and recorded a low of $82.00, where it is currently hovering around $82.72.
Although, crude rose yesterday backed by the U.S. data that showed a kind of improvement in their economy, as GDP figures showed more than expected growth in the second quarter along with high income figures, which eased fears over the U.S. economy that is growing slower than expectations, which affects the fragile global recovery.
Fears and concerns remain evident in markets over the global recovery and whether the global economy is heading into another recession amid the deepening debt crisis in Europe, and slowing growth in major economies, which affect oil prices negatively and push it to the downside.
Yesterday, investors shifted their focus to U.S. data instead of Europe, in order to have some optimistic data that would help world markets, as global equities are facing the worst decline since a long time and any good data can be helpful.
Nonetheless, focus now returned to Europe amid the deepening debt crisis and how the leaders will act to avert contagion risks, as we saw the German parliament approved on EFSF expanding measures by majority, in order to support debt laden nation in the region and to help slowing growth in the Euro area.
Despite Euro area leaders’ efforts and actions, confidence in the world economy in general and in European economy in particular remains weak, as economists fear a double dip recession for the global economy due to the fragile recovery and deepening crisis in Europe, as for this continent, it is facing the worst debt crisis ever and a slowing pace of growth which puts more negative pressure on countries, especially debt laden countries.
All these factors are keeping fears and concerns along with bad sentiment afloat, as we saw the relief rally yesterday for markets after the American data, but they returned to decline at the end of this week, where investors are closing their positions and waiting for effective actions from the European leaders that indicate their ability to contain the crisis, where crude is a growth sensitive commodity and can be affected significantly amid slowing growth.
Volatility may remain evident in markets, but the negative momentum will dominate trading for commodities in particular and global stocks in general.