|Previous||4.2 million barrels|
|Forecast||1.5 million barrels|
|Analysis||Crude oil struggles today after huge losses that achieved yesterday amid fears and concerns that covered financial markets ahead of Greece’s debt swap deal which will be held tomorrow, where investors are worried as not enough approvals from private sector will take the country into an orderly default.|
Crude oil opened today’s session at $104.88 recording so far a high of $105.35 and a low of $104.75, where it is currently trading around $105.15 a barrel.
Crude oil declined sharply yesterday losing more than two dollars after tensions cooled down between Iran and the west, as the EU foreign policy chief, who represents the United States, Russia, China, France, Britain and Germany in negotiations with Iran, announced a fresh round of talks with Iran about its nuclear program after weeks of consultations with the other powers.
Also, the president of the United States Barack Obama said that a diplomatic solution can prevent war with Iran, but it has to end the mounting crisis with the West over its disputed nuclear program, and must show its peaceful intensions in this program.
These comments and bold actions eased fears over global oil supplies which increased recently and took crude upwards to these high levels as a military intervention in Iran was too close, but even now, it remained possible as a last resort if diplomatic solutions failed to prevent the country from its nuclear program.
Dear reader, this was the main factor behind this huge decline that seen in crude prices, however, we can take a look into other factors that helped as well to push crude downwards and prevent the commodity from staying at these high levels, as the ADP reported yesterday a rise in US inventories by 4.6 million barrels on the week ended March 2, and distillates inventories rose 924,000 barrels.
This report is considered to be an indication on today’s EIA official report which is expected to show a rise in inventories by 1.5 million barrels, compared to last report which show 4.2 million barrels added to US inventories, this report would relief pressures on the commodity and take a part in pushing it to the downside.
Amid these downside pressures, we can point to the weakening dollar which played a significant role in pushing crude to the downside after it been demanded strongly yesterday as a safe haven and achieved huge gains, as it rallied to the highest at 79.86 from the opening price at 79.43.
In the world’s biggest economy, heavy data is on the list today which attracts investor’s attention as improving labor sector is expected last month, as the ADP may report 215 thousands added jobs to the private sector, which would increase the demand on the commodity amid stronger labor sector and higher income levels.
In general, volatility will be high today in crude’s trading ahead of the EIA report and major data from the united states, where investor before that would be interesting in comments over Greece’s debt swap deal which would define the direction of financial markets due its effect on the economy, confidence and fears of contagion to other debt-laden countries.