|News||Crude declines today after yesterday's gains|
|Analysis||Crude oil declines today after yesterday’s gains which caused by hopes in Europe amid central banks actions to support growth, and an initial agreement from Greece’s parties on measures that would secure a 130 billion Euros bailout, but unfortunately it failed to convince EU which called the negative picture back.|
Crude oil opened today’s session at $ 99.75 and recorded a high of $99.84 and a low of $99.02, where it is currently trading around $99.18.
Crude managed yesterday to achieve an upside movements but it remained below the psychological levels $100, this upside trend can be referred to signs of agreement in Greece as its PM said that the three political parties finally agreed on austerity package, however, Euro finance ministers have postponed the approval on 130 billion bailout until next week calling for further reductions by 325 million euros.
Investors had disappointed after Euro ministers delayed the approval for second bailout which been reflected on financial markets, as we can see how crude retreated sharply today to lose most of yesterday’s gains.
Amid this disappointing wave that spread among financial markets and had affected crude negatively, the organization of petroleum exporting countries (OPEC) came to add more negative pressures on the commodity after it slashed its global oil demand forecasts amid weakening global economy and deepening debt crisis in Europe.
OPEC’s statement signaled that oil demand growth will slow to 900,000 barrels a day in 2012 from 1 million anticipated last year, where the organization said that “Downside risks prevail, and worries about the U.S. economy along with EU debt concerns are adding to the uncertainties impacting world oil consumption this year.”
And by looking at the most important factors that affect crude, global oil supplies and especially Iran and its problems with the west, tensions between both have increased lately amid an expected military intervention, but India has played a significant role in easing the pressure a little bit on Iran’s oil supply, as it neglected US-EU sanctions and ambitions to shut Iran’s nuclear program after it announced a trade delegation which would enhance trading ways between both countries and especially in crude trading.
India and China are most important customers for Iran and their refusal to halt Iran’s oil eases the pressure on the country from the west’s sanctions, as China and India import around 34% of Iran’s oil exports which account 9% of India’s oil consumption and 6% of China’s, and would lead us that if both countries increased their shares in Iran’s oil, there would be no pressure on it at all from West’s sanctions.
All in all, crude oil would be volatile today as it is the end of the week and uncertainty is high, which forces investors to close their positions and avoid any unexpected losses as any important comments from officials in Europe would indeed change the whole trend and push the market up or down.