|News||Crude declines amid rising fears|
|Analysis||Crude oil declined heavily at the beginning of the week amid fears in Europe that debt crisis is deepening, where uncertainty dominates global markets, and the fact that the global economy is slowing became more obvious especially after Japan reported a weak industrial sector.|
Many signs are seen around the globe showed that global economy is struggling due many factors, as the world’s biggest economy is not feeling well, as U.S. Super committee is not finding a deal on how they will reduce the budget deficit by $1.2 trillion, where it is expected that they will announce their failure of reaching a deal today.
Crude oil for January delivery opened today’s session at $97.52 and recorded a high of $97.85, where it retreated sharply after that reaching so far a low of $96.01 and it is currently trading negatively around $96.05.
Oil is affected by negative factors that kept it within the downward trend beating any positive factor that could give it some positive momentum, where it continued its downside rally that started last week moving below the $100 levels.
From Asia, negative signs are seen from Japan after it reported w worse than expected activities in the industrial sector amid declining exports, indicating that the yen's appreciation and Europe's debt crisis both are still holding away the nation's recovery since March's 11 disaster.
On the other hand, Europe remain the main focus for investors as its crisis is an endless tragedy that is keeping growth pace very weak amid the strict austerity measures that are weighing down the economy, where fears are spreading in the continent which keep the economic activities limited.
The rating agency Moody’s warned today that the future image for France would be negative amid rising borrowing costs on the country, and a slowing pace of growth amid challenges that are affecting the whole economy, where France is doing her best to keep its debt rating on the top AAA.
Crude is a growth sensitive commodity and signs of a slowing growth pace in Europe and Asia would affect it negatively taking it from high levels into its normal levels, as the global economy is not stable and it faces a lot of challenges and retardants.
On a way or another, European leaders would act seriously and stop this crisis from spreading, but the question is when, and this is keeping uncertainty high dominates global markets, where crude will be so volatile today ahead of major news that could be announced from Europe or U.S., but before that, it will continue its downside movement indeed.