|News||Crude gains amid hopes from Europe|
|Analysis||Crude oil continued its upside rally for the second consecutive day amid hopes from Europe that the Italian parliament will pass the austerity measures which would push Berlusconi to resign as he promised, and Greece with the new PM would hopefully defeat fears and take the new bailout in order to avoid collapse.|
Crude is benefiting from investors’ hopes that give it a positive momentum despite factors that could weigh down crude. The European Commission slashed its forecasts for the Euro-zone growth to almost the half for 2012 amid deepening debt crisis and sharp austerity measures that would hurt the economy.
Crude oil for December delivery opened today’s session at $ 97.50 rebounded from the lowest level it recorded at $97.35 to reach so far a high of $98.50, where it is currently trading around $98.25.
Although, the international Energy Agency cut its forecasts for Chinese oil demand in 2012 amid slowing growth there, which will hold down oil consumption, but it raised its forecasts for Indian demand expecting more oil consuming in 2012 despite slowing growth as well.
It is worth to mention that the IEA hinted this week that oil will remain elevated at the time being despite the slowing growth worldwide, where it may reach $150 level this year if investment in the oil-producing countries is lower than required to meet growth in demand from emerging economies.
Volatility is appearing constantly on crude trading amid high uncertainty from Europe, where hopes began to appear since yesterday after Greece formed its coalition government led by Lucas Papdemos which aims to run the country out of its crisis and approve the new bailout to avoid collapse.
Also, the U.S. economy showed yesterday that the labor sector is recovering somehow, as the initial jobless claims dropped more than expected. Which is considered positive signs for better labor sector and a recovering economy, and it will support the global recovery pace at the end.
With lack of major fundamentals from US, Asia and Europe, volatility will remain evident ahead of the Italian vote which is considered to be the main factor that would drive the euro zone to the abyss or it will help it along with European efforts to get out of this crisis.
At the end of the week, investors will close their positions in order to avoid any unexpected losses with high uncertainty in Europe and any factors or news would be released that would change the whole direction of the market, and this will make investors wait for any data that would give signs over the direction in the coming period.
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