NewsCrude oil hovers around the opening levelPreviousForecastAnalysisMixed trading is dominant on crude oil since yesterday and it continued today ahead of the finance ministers’ meeting today and the 23 crisis summit. The Greek parliament passed additional austerity measures which considered a sign of achieving troika’s requirements yet the uncertainty remains high.
Mixed factors are affecting crude oil today that makes it steady at the opening price, also, investors are waiting for any sign from EU finance ministers’ meeting today that would indicate the role of the plan that leaders might announce on their 23 crisis summit.
Crude oil for December delivery opened the session at $86.42 and reached so far a high of $86.81 and recorded a low of $85.93 where it is currently trading at $86.10.
At the end of the week, investors are maintaining their positions waiting for a roadmap for Europe that leaders might present, expectations and hopes are high for this plan to be comprehensive and effective in solving the crisis and prevent contagion risks by putting new measures that would support debt-laden nations.
On the other hand, Libya’s oil production is expected to rebound even faster now that Qaddafi died yesterday, which would help Libya to get back on the track and the situation will return as before, as Libya is one of the big oil producers, and it reduced its productivity during the uprisings there.
Rating agencies are doing their job by taking critical decisions, as S&P rating agency warned France that it would likely be downgraded amid all these challenges facing it and deepening debt crisis, and the agency did not rule out Spain, Italy, Ireland and Portugal will likely be downgraded amid bad economic conditions and slowing growth in the continent.
Nonetheless, troika said yesterday that Greece should obtain the sixth tranche of 2010’s bailout package as soon as possible as economic challenges have increased in the last period driven by the hard austerity measures that weighted the growth down, yet the Greek government will likely meet the target deficit that set for 2012, and it’s preferable to apply further austerity measures in order to control the deficit.
Yesterday, the Greek Prime Minister, George Papandreou won a vote of confidence in the Parliament on the expanded austerity package, which comprise of tax raises, pensions and wages cuts, and a plan to suspend more than 30,000 state workers in addition to provisions to break the collective pay-bargaining power of Greek Unions.
Without fundamentals from U.S. and poor fundamentals from Europe, the focus will be on developments for the region and what the finance ministers’ meeting will add for the markets amid deepening debt crisis and slowing growth.