NewsOil trading within a narrow range
AnalysisMixed sentiment dominated markets yesterday over the European debt crisis and actions that leaders may take to contain the crisis, which made crude trading volatile achieving some decline despite the huge drop for the U.S. dollar which could send crude higher.

Crude was affected by many factors yesterday that kept it so close to the opening price, as the dollar declined significantly yesterday which affected crude positively and provided upside pressures, but on the other hand, fears have increased over debt crisis in Europe and what are the measures that they may take to ease contagion effects.

Crude oil futures for November settlement were volatile since the opening of the session at $84.89 recording the high of $85.37 and the low of $84.62 a barrel, where it is currently trading at $85.20.

As the Slovak parliament refused to pass the extension of the scope of EFSF, which spread concerns in markets over the Europe, especially after Trichet said that debt crisis in Europe became systematic and is a risk that cannot be avoided.

Nevertheless, the president of the European Commission Jose Barroso called for a road map for the European continent and urged European leaders to take effective actions on October 23 regarding Greece and to support the European banks as well.

The comments from Barroso along with an expected optimistic second vote from the Slovak parliament to pass the measures on Friday eased some of the fears that were dominant in markets regarding contagion risks and the banking system in Europe which is a very important problem that they have to solve by providing enough liquidity between those banks.

On the other hand, data that released from China yesterday showed that growth is not gathering upside momentum as usual, as exports rose much less than forecasted to climb by 17.1% which pressured the surplus to narrow to $14.51 billion in September, affected mainly by the European debt crisis and slowing growth around the globe.

Mixed sentiment as we saw affected crude oil, which made its trading volatile and kept it almost stabilized despite the ongoing efforts from European leaders in order to calm markets and contain the crisis to avoid contagion risks.

Oil is expected to remain volatile in today’s trading ahead of the EIA report that will be published a day later than usual due to the Columbus Day holiday, where it is expected to show a drop by 0.3 million barrels last week compared to a precious drop of 4.7 million barrels.