NewsOil struggles around opening levels
AnalysisCrude oil is trying to continue the three-days upside rally amid high speculation that global supplies will be damaged by the sanctions on Iran, where the signs of improvements in the U.S. and confidence rising in Europe despite the debt crisis helped hold commodities gains.

Crude oil opened today’s session at $100.93 and reached a high of $101.39 and a low of $100.52, where it is currently fluctuating around $100.75.

The Iranian magic effect in pushing crude prices to upside remains amid worries and concerns over oil supplies, with the US led push for sanctions on the Iranian exports as we all know, and the Iranian threat to close the Strait of Hormuz which has pushed crude above $100 levels.

Although, the Iranian government has warned gulf countries not to cover any oil supply’ shortage if sanctions imposed on their exports, but the KSA dismissed all these calls to ensure that it will replace any shortage in oil supplies, which made Iran call KSA to be “more wise and responsible”.

On the other hand, the world’s biggest economy showed signs of improvement yesterday in the manufacturing sector, as the Empire manufacturing rose unexpectedly which encouraged investors that the economy is doing well, while the industrial production for December figures will be released today and it is expected to show much better reading than the previous month.

Not just the United States that encouraged investors yesterday, where the European continent has a great role as well, as we saw good data and improved confidence despite the debt crisis as well as declining borrowing costs.

We saw how confidence unexpectedly improved in Germany and Euro zone showing that investors are much faithful than we expected in leaders’ ability to solve the debt crisis, also, they neglected the downgrade move from S&P to Euro zone nations, as the market continued its upside move without taking into consideration any negative factor, as the debt auctions found great demand from investors which pushed borrowing costs to decline amid high demand from the market.

Back to the generator of the crisis Greece, it is supposed to start talks with the private sector again, after negotiations stopped due to a prime difference between the two parties on the interest that would be paid by the government for investors on new bonds. Ahead of the new round of talks the Greek PM said if a deal can't be reached in negotiations with the nation's creditors that are due to resume Wednesday, private investors may be forced to take losses.

Mixed factors affect crude oil nowadays, as signs from Europe are countered by bad data in the continent, and any good news from the United States will have its effect on the market for a while then it will be ignored and investors would look for any other sign whether it is positive or negative; investors are waiting for any glimpse of hope that will be reflected immediately on markets, but the facts we see would offset this effect in a while.

All these factors drive volatility higher today ahead of majors data will be released from Europe and US, as the UK’s jobs report is expected to a slight improvement in the sector, where we will see today also the confidence meter in the market, as the Portuguese government will hold a short term debt auction and Germany as well, while Monti and Cameron will meet in London; on the other hand, he International Energy Agency (IEA) will release its oil report at 9:00 GMT.