|News||Volatility is dominating crude trading|
|Analysis||Crude oil is trading within a very narrow range since morning after it rose in the past week backed by hopes from Europe that a political conflict in Italy is going to be solved by appointing a new PM, following the same political step in Greece. |
Crude is trading at very high levels that were not seen in several months, as despite the European debt crisis that it is the main thing that drove oil lower, hopes from Europe that it may solve its crisis have pushed crude oil back to the upside.
Europe is the leader for global markets nowadays, as any hopes that it might beat its crisis and proceed with normal economic conditions is driving investors to be so optimistic, and take all commodities and stocks higher.
Italy has reached a unified stance by appointing Mario Monti as a new PM that will lead the county into better economic conditions, and he will cut the huge Italian debt which reached 1.9 trillion Euros so far, and the Italian bonds surged to sensitive levels 7%, the level that forced Greece, Portugal and Ireland to ask for bailouts.
The new PM in Italy is expected to show a clear roadmap for the country to follow, where goals should be achieved in the coming period by following these instructions, where hopes from Italian people, European leaders and global leaders are high that Monti is able to achieve the awaited goals.
All these encouraged factors are keeping crude oil between high levels, where investors have ignored the fact that there is a real crisis in Europe and it might not be solved despite all efforts from European leaders, but the main two problems are Greece and Italy, and any move from these countries that show a potential solution for their debt, can take global markets higher and spread optimism.
On the other hand, Japan has its main role in supporting global markets significantly, as it reported much better results and rebounded into expansion in the third quarter from the second recovering from the March earthquake.
The Japanese economy grew at 6.0% annual pace compared to contraction by 2.1% in the second quarter, and it a growth by 1.5% on quarterly basis, these data are very positive signs that the world’s third largest economy is recovering, well supporting demand on crude.
Today, crude oil may see some downside moves, because it reached high levels and it may be resisted hardly, but the positive momentum still exists with hopes from Europe that it would be able to solve its crisis with the new steps from Italy and Greece.