|News||Crude struggles to rise after last week's losses|
|Analysis||After last week losses, crude oil struggles to rise at the beginning of this week where in general , crude prices remain so high and previous week’s decline was a normal correction movements, however, crude today is gaining the upside momentum from concerns over global oil supplies as the United States may join Israel in a military intervention in Iran.|
Crude oil opened today’s session at $106.49 and recorded a high of $107.26 and a low of $106.49, where it is currently trading around106.72 a barrel.
Tensions increased between Iran and the West as Israel is trying to have the United States on its side and help it with a military intervention in Iran to stop its nuclear development program, despite US’s ambition to hold off the country from its nuclear without a military intervention.
Today, the President of the United States will meet Israeli PM to discuss the situation of Iran, where Obama’s sees that tougher sanctions on Iran at the current time is enough to tackle Iran’s program process, but Israel is trying to convince US to join it in a military intervention in Iran, the one who will win today in these discussions will change the direction of crude oil.
In general, economists and analysts say that Saudi Arabia and other oil producers that pledged to cover the shortage in oil, do not have enough spare capacity to quickly cover up Iran’s 4 million barrels a day of crude.
Dear reader, this is the main factor behind keeping crude in these high levels providing the commodity with enough bullish momentum that help it is neglecting any other negative factor, among that, an accident between two vehicles in Illinois, US caused an oil leak and fire in Enbridge’s oil pipeline that provide oil to the States from Canada, where the company will be forced to slow or shut some the flow of crude on pipelines between Alberta and Superior to make sure storage tanks do not become filled to capacity.
On the other hand, the negative effect from China is affecting crude indeed, which keeping crude around its opening levels countering the positive effect that derived from fears over Iran’s oil, as China set its lowest annual growth target in eight years to 7.5 percent in 2012, which added negative pressures on commodities including oil.
Looking at Europe, hopes are mixed with fears in the continent after EU leaders’ summit which held last week and came up with expected results as EU countries, except UK and Czech Republic, signed on the treaty changes that would avoid any excessive debt in these countries in the future, but fears are still dominating the market over Greece as this week a decision is due from investors whether to accept the debt-swaps plan or not.
All in all, volatility will be high today amid strong different factors that affect the commodity, and as we said, eyes for crude traders would be on US president Obama and Israeli PM’s meeting that will be held today hoping not to raise the tension level over global oil supplies.