|News||Crude is volatile at the end of the week|
|Analysis||Crude oil retreated today to cut some of yesterday’s gains that achieved after optimism from U.S. that the economy is doing well, along with a comprehensive plan declared by EU leaders that would be sufficient to contain the crisis from spreading to bigger European economies.|
At the end of this week, crude oil satisfied with gains that achieved during the week due to hopes from Europe that a deal where reached to support the debt-laden nation and prevent the crisis’ ghost from spreading to other nations, especially the bigger ones such as Italy and Spain.
Also, the U.S. economy is getting better as GDP figures showed yesterday that the economy is growing by 2.5% at its fastest pace this year, giving signs that the global recovery train will be supported by the fastest growth pace in the world’s largest economy, which added more positive momentum to crude oil yesterday.
Oil for December delivery is fluctuating around $93.38 a barrel after recording a high of $93.96 and a low of $92.98 after it opened the session at $93.87.
Volatility is dominating global markets and crude oil in particular, as it trading within a narrow range but with a negative momentum due to investors that are closing their positions at the end of the week to prevent any surprises that may cost them a lot of money.
The chief executive officer of the EFSF said that China may not support Europe as quickly as was thought by buying EFSF’ bonds as planned since China is a regular buyer of the fund’s bonds, but China is a rich surplus country and it may continue the regular buying steps, where he indicated as well that the Greek bailout deal was an exceptional case and no need to repeat it.
China is the main target for EU leaders that would support the continent in these times to ensure containing the crisis and get out of the crisis hole as soon as possible, and if China do not respond to leaders as planned and wont buying bonds as they need to support liquidity in Europe by the Special Purpose Vehicle.
Crude oil is expected to maintain its volatile case at the end of the week and ahead of the U.S. income report which will give signs over the economy in general, and it may support crude if it show better than expected figures where it may show a rise by 0.3%.
On the other hand, lack of fundamentals are adding more volatility to global markets and especially European markets, which will keep investors looking for any comments that may give more details over the European plan after it relieved the market when it been announced.