|News||Crude oil mixed ahead of US GDP figures|
|Analysis||Crude oil is volatile today after yesterday’s fluctuations which kept the commodity around its opening levels, as mixed factors still affect crude oil where Iran threatened to shut its exports to Europe from now, while investors turn cautious after the Feds statement and ongoing Greek talks with private bondholders. |
Crude oil is currently trading around it openening levels at $99.83, where it recorded a high of $100.00 and a low of $99.38, and expected to fluctuate strongly today with the GDP figures and ahead of the end of the week.
Iran as we know, is the main factor behind keeping crude at those levels, thereafter the European nations went forward with the embargo on Iran’s oil from the first of July this year so that nations that rely the most on their oil imports from Iran can find alternative sources. On the other hand, Iran’s president threatened yesterday that his country would shut off all oil exports to Europe even before the embargo starts.
Today, volatility will be high with the U.S. growth figures for the fourth quarter which will be closely monitored by investors, where expectations are to see accelerating growth to 3.0%, which will support the sentiment and risk appetite.
A strong economy in the fourth quarter will unleash the commodity to fly as it will give us clearer picture for the current quarter, where a stronger economy that is the world’s biggest oil consumer will indeed push the commodity to the upside.
In Europe, eyes remain on Greece and its negotiations with the private bondholders to conclude a decisive plan that would satisfy both parties, which will ease the path ahead of the country to control its debt, and accordingly hopes and confidence will soar in the region.
Both Greek and private-sector bondholders said negotiations showed progress on Thursday and talks will continue today, where they expect a deal to be reached within a couple of days.
However, The Spanish economy is deteriorating more and more especially its labor sector which getting weak day by day, as the unemployment rose to the highest in 15 years to 22.9% in the fourth quarter, where the economy itself is expected to contract by 1.5% this year.
At the end of this week, investors will avoid any unexpected losses by closing their positions amid this high uncertainty in global markets, especially that the European summit will take place at the beginning of next week, and markets will be so volatile ahead of it as no one knows how things will go in the first summit in 2012.