|News||Crude oil is correcting some of yesterday's losses|
|Analysis||At the end of the week, crude is looking to be so volatile amid mixed factors that is affected by, as fears and concerns in Europe returned to the scene amid conflict between French president and German Chancellor on the role of ECB, but despite all that crude is rising today correcting some of yesterday’s losses.|
Crude oil for January 2012 delivery opened the session today at $98.73 after it declined sharply yesterday from a high of $103.34 to today’s opening price, where it recorded so far a high of $99.55 after it reached a low of $98.05, and it is currently trading positively around $99.50>
Crude yesterday retreated below the$100 barrier amid doubts in Europe about the fact that the crisis is deepening indeed, as Merkel and Sarkozy are not on the same track on how the ECB would act in order to control the crisis and prevent it from spreading, especially after borrowing costs in Europe surged to record.
However, we can find glimpse of hope among investors that European leaders’ efforts could dampen the crisis’ effect and no to let it spread widely to other countries, but the fact is, nobody knows how things are going to be, which added more volatility and fluctuations into financial markets.
On the other hand, crude is correcting some of yesterday’s losses benefiting from the weakening dollar which added positive momentum to crude, and hopes that Italy and Greece would be able to put on a roadmap to exit from their bad economic situation.
As the Italian new PM is willing to provide his austerity plan to his parliament and to have their approval on it, and it is widely expected that it will pass easily, as for Greece, it is the day that the new PM will take his 2012 spending plan to his cabinet seeking for approval and advise in order to submit it to the parliament later.
Today, nothing is stopping crude from its upside correction rally, as it retreated yesterday below the $100 barrier, and today’s upside movements are a normal act for it trying to defeat the downside wave, especially that the U.S. dollar is deteriorating which gives an advantage for crude.
And the main reason behind pushing oil above the 100 barrier was the news of reversing the Seaway pipeline which will now provide the connection from central US and Canada to the coast of the Gulf of Mexico which will increase the supply of WTI crude and accordingly increase its competitive advantage and minimize its spread and with the ICE Brent.
Volatility is able today to control markets movements, and crude will be so volatile due to lack of fundamentals from the European and U.S. agenda, which will let the bridle for European comments and acts to lead the market direction.