|Previous||-1.4 million barrel|
|Forecast||-1.2 million barrel|
|Analysis||Crude oil declines today amid uncertainty in Europe with fears of contagion have increased as borrowing costs are edging higher with Italian yields remained above critical levels 7%, although U.S. retail sales gave crude a positive momentum when it rose yesterday.|
Crude oil for December delivery opened the session at $99.20 and fluctuated heavily to record a low of $98.38 and it reached a high of $99.29, where it is currently trading with high volatility around 98.88
Uncertainty is the status for Europe with mixed factors, where this week was the auction week for European bonds that it showed higher yields which stepped up fears and concerns in the region that contagion risk is likely to happen in the coming period.
On the other hand, volatility is dominating crude trading ahead of major data that will appear today late, as the new Greek PM and his government would set for a parliamentary confidence vote whether they are appropriate for the country or not, but, it is widely expected that the government will pass this vote easily.
The new Greek PM is the new Greek hero that all hopes and wishes are surrounding him to take the country out of this deterioration and a possibility of announcing default, as he would ensure receiving the second bailout 130 billion Euros and an immediate 8 billion sixth tranche of last year bailout.
By the same token, the new Italian PM is willing to announce his new cabinet, where he has to show Italian people that his potential government is able to drive Italy out of this rising debt status.
By collecting news today from Greece, Italy and Europe in general, the image for Europe’s future and its crisis should be more clear that now by putting headlines for steps that they might take in order to hold down the deepening crisis and to contain it from spreading to other countries.
Yesterday, we saw crude rising despite the uncertainty and fears are spreading in Europe, and that occurred due to the optimistic retail sales that released by U.S. as we said, where crude neglected all inhibitory data and continued rising, but the strong resistance at $100 levels had stopped it and sent it lower.
The EIA today may announce for a decline in U.S. inventories last week by 1.2 million barrels, which will give a strong positive momentum for crude despite all frustrations that might appear from Europe and other economies, as it reported a drop by 1.4 million barrels in the past week.
We must note that the U.S. inflation data and Euro zone Inflation data will be released today, and they will have their magic effect indeed, as they have their role in the global economy, and any change in their monetary stance or an indication that they would change it, will have the effect on global markets.