NewsCrude oil climbs amid hopes from Europe
Previous
Forecast
AnalysisCrude oil continued its rally from last week high closing since the opening of the week’s session on hopes that European leaders will put a plan to solve the sovereign debt crisis within a week after G-20 finances ministers have put the 23 crisis summit as a deadline to introduce the plan.

Since Europe is the main focus for investors, and after finance chiefs announced that they gave EU one week to solve its crisis by putting a comprehensive plan for Greece, other debt-laden countries and for recapitalizing European banks, investors are being optimistic over the outlook for the European economy that threatened the global economy.

Crude oil opened today’s session at $87.15 and reached the low of $86.90 and it rose to reach so far a high of $88.05, where it is currently hovering positively around $87.81 and is expected to continue its rally if optimism remained in markets.

Fears and concerns over the global economy that were dominant in markets have eased after G-20 meeting that lasts for two days, Europe is the biggest fears’ generator around the globe for the time being, as the debt crisis that dominate the continent is deepening which increased doubts over the global economy  if it heading into another recession.

Although, risk appetite among investors has improved at the beginning of the week due to the meeting as we said, which made crude oil more demanded than before, as EU may reveal the rescue plan in their next meeting on 23rd of this month, indicating a much more healthier economy in Europe over the coming period that would increase crude demand.

Nontheless, the Slovakian approve on expanding the EFSF has increased hopes and improved the outlook for Europe, as the EFSF is considered oner of the important efforts that leaders decided to solve the debt crisis and prevent it from spreading.

And from U.S., retail sales have increased more than expected in September as data showed last week, which indicated a better recovery pace in the world’s largest economy that mainly affect the global recovery that lost its upside momentum in the last period, where signs of improvement it the global economy, would affect oil prices significantly and push it to the upside.

On the other hand, U.S. dollar declined last week and is achieving more downside movements since the opening of the session, due to optimism that appeared in markets which reduced the demand on dollar as a safe haven, and accordingly, it added more positive pressures on crude to continue the rally.

As it opened the session at 76.61 to record so far a low of 76.49 after it reached a high of 76.79, where it is currently trading with a negative momentum around 76.52, and it is expected to continue this decline today.