|News||Crude struggles to beat yesterday's losses|
|Analysis||Crude oil inclines today in attempts to erase yesterday’s losses which achieved after US oil inventories rose unexpectedly which indicated that the world’s biggest oil consumer, U.S.’s consuming is easing amid signs of slowing growth.|
The EIA report showed that U.S commercial crude oil inventories increased by 4.2 million barrels from the previous week compared to the previous reading at 3.6 million barrels. At 338.9 million barrels, U.S. crude oil inventories are in the upper limit of the average range for this time of year, while distillate fuel inventories increased by 0.1 million barrels last week and are in the middle of the average range for this time of year.
The effect from US inventories rise has countered a strong manufacturing in China, Euro zone, Germany and UK after they released their reading for PMI manufacturing, where optimism appeared in Europe after these data along with declining borrowing costs on Euro members.
In general, the effect from Iran and its threats to cut the country’s oil exports to Europe before the union starts its embargo on Iranian oil, continued to give crude upside momentum that counters any negative factor that would affect crude prices.
Also, the weakening dollar yesterday couldn’t counter inventories’ negative effect despite that the dollar declined sharply yesterday, as it opened yesterday’s session at 79.29 and closed it at 78.89, where it opened today’s session at 78.88 and continued to trade around these levels after it recorded a low of 78.71.
On the other hand, Russia the world’s largest oil producer, its output climbed to 10.36 million barrels a day last month from 10.21 million barrels a day in January 2011, which is 1.4% increase, according to preliminary data from the Energy Ministry’s CDU-TEK unit.
In Europe, optimistic investors nowadays are waiting for decisions or a deal between Greece and its private bondholders where hopes are seen in markets that a deal would be reached within couple of days with possibility of more haircuts for investors and lower interest on newly issued bonds, which help the country to stand up despite its high debt.
At the current time period, financial markets are closely monitor at companies’ results, as in the earning season markets’ focus would be on companies’ results that reflect the health of their economies amid current challenges that face economies.
Today, auctions from Spain and France are due, where Spain would sell around 5 billion Euros of 3, 4, and five years maturities, and France will sell around 8.5 billion Euros of even longer maturities, where these auctions will be highly monitored as it reflects the current sentiment and investors’ confidence in leaders’ measures and solutions.