|Previous||3.9 million barrel|
|Forecast||-1.0 million barrel|
|Analysis||Crude oil continues today the three days rally where it fluctuates heavily yesterday amid conflict between factors that affect it, as the fear from Iran’s threat to close the Strait of Hormuz is the main factor that keeping crude up despite fears from deepening crisis in Europe, and the worrying outlook for Greece is getting worse as well.|
Iran is taking crude high and continue to push crude to 7-months high despite the deepening debt crisis in Europe which may curb the oil demand in the future and would affect the global economy negatively, which will reflect negatively on crude demand, where an EU official announced that European governments had agreed in principle to ban oil imports from Iran.
Crude oil opened today’s session at $103.22 and reached a low of $102.78 and recorded so far a high of $103.71, where it is currently hovering around $103.33 a barrel.
However, tension in Europe is rising and fears are increasing as investors are worried about the future of the continent, as many signs of dark future is awaiting the continent, where Greece is back to focus as the possibility of default is close this year.
The Greek Prime Minister Lucas Papademos said that deeper austerity measures are the only way for the country to remain in the euro bloc and receive more loans from international creditors, steps that would avert an economic collapse that may see in March.
France will be in focus today as it would hold a bond auction with targets between 7-8 billion Euros , these bonds will mature in October 2021 and April 2026, which considered a long term bonds, we are hoping to see confidence among investors at the auction today with low borrowing costs in general.
Yesterday, Germany sold 4.06 billion euros of 10-year government bonds, where showed a huge demand from investors compared to the previous sale in November where interest was anemic.
The Spanish government led the Prime Minister Mariano Rajoy is expected to announce a new round of austerity measures today in order to protect the euro zone's fourth largest economy from calling for bailouts, as the country is seeking to reduce the deficit.
We saw yesterday how crude managed to incline despite many factors that would push it to the downside, but the Iranian effect on crude is so high and if it happens and the country closed the Strait of Hormuz, oil prices will rise and rise to infinity.
Today, the US crude inventories may be dropped by 1.0 million barrels last week, as the EIA may report today after it reported a rise in inventories by 3.9 million barrels in previous reading, the drop in crude inventories is pushing crude to the upside as well, and it may fluctuate heavily ahead of the report.