|News||Oil declines at the end of the week|
|Analysis||Crude oil started the day with bearish moves amid the lack of fundamentals that triggered volatility as well as the end of the week, where investors close their positions amid high uncertainties in global markets.|
No major data is expected today which will trigger volatility in financial markets, as Europe will not hold any auctions today and will not released any major fundamentals, but still any comments would move markets.
Crude oil opened today’s session at $101.08 and reached a high of $102.04 and a low of $100.05, where it is currently trading around $100.29 levels.
Yesterday, the U.S. oil inventories unexpectedly declined sharply which signals that demand is rising at this time in the world biggest oil consumer, but negative factors on crude kept it around opening levels.
The EIA report showed that the U.S commercial crude oil inventories decreased by 3.4 million barrels from the previous week. At 331.2 million barrels, U.S. crude oil inventories are in the upper limit of the average range for this time of year, where distillate fuel inventories increased by 0.4 million barrels last week and are in the middle of the average range for this time of year.
Growth fears in Europe is pushing crude to the downside which countered the effect from the declining inventories in Europe and the upside effect on crude from the diving dollar; also, the earning season is beginning nowadays and has it effect on financial markets.
On the other hand, the Japanese Trade Minister said today that his government told U.S. counterparts that Japan's imports of Iranian crude oil are on the decline and the trend will continue amid meeting held to explain the U.S. sanctions on countries that trade with Iran.
In Europe, investors are awaiting for results from meeting and negotiations between Greece and private bondholders, as talks between both parties made progress yesterday as the Institute for International Finance (IIF) said in a statement that talks had been productive, as well as the Greek finance minister, and they will resume today.
The International Monetary Fund, as a UK newspaper claims, has cut its global growth forecasts amid weakening economies and deepening debt crisis, as the fund expects that the euro zone will contract by 0.5% this year, and much worse expectations for Italy and Spain, it also cut its global growth predictions from 4% to 3.3% and the European Central Bank will have to bolster the economy by more liquidity in the coming period.
In China, The central bank will let the largest lenders to increase new loans by a maximum of 5%, as the banking regulator is delaying the implementation of the most stringent capital adequacy ratios and may lower risk weightings for loans to small businesses and companies, four people said separately.
All in all, volatility will be high today at the end of the week as investors close their positions to avert any unexpected losses amid high uncertainty.