|News||Crude oil is trading above $100 levels|
|Analysis||Crude oil found many positive factors that pushed it to the upside, as crude started the year with positivity from different factors, as the non manufacturing PMI in China climbed in December to add signs that the recovery is getting stronger, and expected strong manufacturing in US, all are encouraging factors that this year would be better than the past one amid hopes from Europe that leaders would act quickly to support the Euro.|
Crude oil is barely moving at the current time; however it rose since the beginning of the session to trade above the physiological level at $100, which gives it upside momentum to neglect any negative factors that would affect it.
Crude oil opened today’s session at $99.71 and recorded a low of $99.64 and rose to reach so far a high of $100.87, where it is currently trading around $100.75.
In China, in spite of the turmoil in overseas markets, the Chinese non-manufacturing PMI for December unexpectedly expanded to 56.0, compared with the previous reading of 49.7 in November, as “festival effects” of western and Chinese New Year celebrations helped to boost the manufacturing PMI.
The stronger recover pace in China is a main factor that would help crude to get its upside momentum as China is the world’s second biggest oil consumer, and stronger economy means stronger demand on crude, which will give it positive momentum amid low supply levels, as rising tension in the middle east is threatening oil supplies.
Turning to oil supplies, the Iranian oil issue remains unclear, as the USA and its allies along with the EU are considering new sanctions on the Iranian oil as we know which increase fears that it will curb the oil supply, which will push oil prices to the upside strongly, and from the Iranian side, it said that if any sanctions happened, it will stop oil passing from the Strait of Hormuz.
Back to Europe which remained for the past year the main factor that drive global markets, as the crisis is deepening and contagion risks are appearing, where many negative consequences can be noticed, however, hopes increased at the beginning of the year that serious measures would be implemented to halt the crisis’ train.
On the other hand, the US dollar is encouraging crude oil to continue this upside journey, as it declined at the beginning of the year due to different factors, as it opened the session at 80.27 and recorded a high of 80.29 then it declined to reach so far a low of 79.88, and is currently trading around 79.95.
In general, trading volumes remain mightily low, which give space for any minor factor to affect crud heavily and give it momentum, where fluctuations may be evident ahead of the American data which may add positive signs for the world’s largest economy.