|News||Crude is volatile ahead of major data from Europe and U.S.|
|Analysis||Crude oil is so volatile since the opening of today’s session looking for any data that might give it some upside momentum that was lost yesterday after the picture of Europe’s future became darker, but Germany showed better than expected growth in third quarter that kept crude afloat.|
Mixed factors are affecting crude oil, but the main driver for markets nowadays is Europe and its deepening debt crisis, but positive data from the continent can take crude higher as we saw last week when Italy and Greece declared new technocrat governments that might rescue both countries from the expected collapse.
Crude oil opened today’s session at $98.09 and it recorded a high of $98.33 and a low of $97.60, where it is currently hovering around $97.80, where the stronger dollar is limiting crude’s upside movements.
Volatility is the status for global markets ahead of major data that will be released by major economies as the Euro zone will announce the GDP figures for the third quarter, which is considered so important amid the deepening debt crisis that halts the growth pace along with hard austerity measures in debt laden countries.
Euro Zone growth is expected to slow due to the crisis that affects growth negatively especially into the fourth quarter; austerity measures by debt laden countries to cut their budget deficit, and slowing global growth as well, pressured the European commission to cut growth forecasts for its Euro zone several days ago.
Crude oil is a sensitive growth commodity and a slowing growth would affect crude significantly and take it to the downside, as we saw yesterday the OECD projected a slowing global economy in the coming period and sees that major economies won’t escape from this slowdown.
Today, the European agenda is packed by many important data and the U.S. agenda as well is going to announce many important data, although, volatility will dominate global markets.
On the other hand, Spain and Greece are intending to hold bond auction today, but investors are hoping that the cost on them will be less than Italy which sold its bonds with the highest yields since 1997 despite appointing a new PM that is intending to solve the debt issue for the country.
Germany’s GDP figures today showed a stronger economy as it revised higher the expansion for the second quarter, where it is the main factor that is keeping crude steady at its opening position despite the vagueness of Europe’s future. France reported expansion in the third quarter compared to the contraction in the second quarter.
U.S. retail sales figures today are expected to show a decline in October with less consumer spending in the economy, where it will affect crude negatively if it decline more than expectations.
Again and again, crude would be volatile today ahead of all these data and news from the global economies that will give signs over the global recovery pace which lost its momentum in the previous period and still worsening in coming months, which affects crude significantly as we said.