NewsCrude struggles at the beginning of the week
AnalysisCrude oil is struggling at the beginning of the week to hold its opening levels as the Iranian issue has a main role in pushing crude to the upside and keeping it at these levels, where the European debt crisis is trying to kick it to the downside, but the winner is Iran by threatening oil supply which keeps it above $100 levels.

Different factors are affecting crude oil globally, where we can see that crude is around high levels despite the European debt crisis which halt the growth in the continent and affect the global economy, which would curb oil demand worldwide.

Crude oil opened today’s session at $101.92 and recorded a high of $102.11 and reached a low of $100.89, where it is currently hovering around its opening levels.

On the other hand, Iran is pushing crude to the upside by threatening to close the Strait of Hormuz and prevent any oil flow through it, which will affect global crude supplies negatively and significantly raise crude prices, as this move came after US, EU and their allies’ consideration to impose new sanctions on the Iranian oil exports in order to stop Iran from developing its nuclear program.

The US defense Secretary issued a clear warning on Sunday that the U.S. military will immediately respond if Iran attempts to close the Strait of Hormuz, which will put a big question mark on world energy supplies, as fifth if global oil supply passes by this Strait.

Back to Europe, Angela Merkel and Nicolas Sarkozy  are supposed to meet today to discuss how to boost growth in euro zone’ members that are struggling amid the sovereign debt crisis and rising unemployment, and to put the last touches on a deal to increase fiscal unity within the currency union.

Also, they may talk about a financial transaction tax, the Tobin tax, which called by France and resisted by Britain unless being applied globally, the matter that could split the EU at a summit this month.

Although, crude oil may return back in the coming period as Morgan Stanly sees, as it released a report yesterday and signaled that loss of supply due to the Strait of Hormuz issue would probably be countered by releases from global strategic petroleum reserves, where “We expect to see more bearish inventory trends in the coming months as seasonal demand weakness and slowing economic growth coalesce with increased supply.”

Today, the US dollar is helping crude to gain its momentum back unlike last week when it rose significantly and pushed crude to the downside after the unemployment rate declined in the world’s biggest economy, and the number of added jobs surged as well, which pushed the dollar sharply upwards.

Although, the US dollar is declining today and giving crude an upside momentum, as the USDIX opened today’s session at 81.34 and recorded a high of 81.49 and a low of 80.99, where it is currently trading negatively around 81.00.

Crude would be volatile today ahead of Merkozy’s meeting which will put the final steps on a plan that would pull the Euro zone from its crisis, and fluctuations would appear on crude trading if nothing happen between Iran and US and their issu.