|News||Crude oil rebounds amid hopes in Europe|
|Analysis||Crude oil rebounded after yesterday’s losses which achieved amid high uncertainty that seen in financial markets, but hopes are covering the market today pushing crude upwards after the German parliament agreed yesterday on giving Greece the second bailout and eyes are today on the ECB which will start the second operation of cheap lending to banks.|
Crude oil opened today’s session at $107.77 and recorded so far a high of $108.60 and a low of $107.77, where it is currently trading around $108.44 a barrel.
Crude oil is trying to cover yesterday’s losses getting the upside momentum from hopes in Europe that the continent would survive from its debt crisis amid leaders’ efforts to contain the crisis by taking helpful measures and provide 130 billion Euros to Greece to avoid a default situation.
The German parliament agreed easily yesterday to give Greece the second bailout by 130 billion Euros which as we said would avert the country from declaring a default, which followed by Standard & Poor's move cutting Greece long-term ratings to 'selective default', after Greece set a deadline on March 8 for private holders of its bonds to participate in an unprecedented bond swap.
Eyes today will be headed towards Germany’s tendency to approve more cash in European emergency funds, where it failed so far on large majority in German parliament to raise the ceiling of those emergency funds, and the ECB will be closely watched today.
The ECB role in fighting the crisis would appear today in its second cheap lending operation to European banks to avoid any expected liquidity problems between banks, as we saw the first operation which ensured almost half a trillion Euros to banks. However, the ECB has decided to temporarily suspend the eligibility of marketable debt instruments issued or fully guaranteed by Greece for use as collateral in Euro system monetary policy operations.
The optimism can be seen among investors today as it reflected on the common currency which rose significantly today pushing the dollar to the downside, where the declining dollar is providing bullish momentum to crude and push it to the upside.
The USDIX opened today’s session at 78.58 and recorded a high of 78.60 and a low of 78.29 and is trading now around 78.32.
In general, crude oil continued to gain the upside momentum from fears over global oil supplies as tensions increased between Iran and the west over Iran’s nuclear program raising the possibilities over a military intervention which would push oil prices to more than double .