NewsCrude jumps on hopes in Europe
AnalysisCrude oil maintained its yesterday upside rally correcting past losses that achieved at the beginning of the week, as hopes in Europe is helping the upside momentum to push crude upwards along with slight rising in US stockpiles, neglecting all other negative factors.

The U.S. oil inventories rise last week but much less than expected as the EIA report showed yesterday, as the U.S. inventories rose by 0.8 million barrels compared to expectations at 1.5 million barrels, where it rose by 4.2 million barrels in the previous reading.

Among positive factors, hopes in Europe over Greece’s debt swaps deal which is expected to success today, have pushed financial markets upwards including oil, as almost 60% of many big banks, companies and insurers that hold Greek bonds in Europe joined this deal that would cut their price of Greek bonds’ holdings.

Yesterday, crude oil found a strong support from better than expected job sector in the world’s biggest economy and oil consumer, as the ADP reported 216 thousands added jobs to the private job sector, increasing signs that Friday’s NFP would be encouraging, which will increase the demand on the commodity.

OPEC, the Organization of the Petroleum Exporting Countries reported that its output of crude oil climbed by 400,000 barrels per day to 31.27 million barrels a day in February from 30.87 million barrels a day in January, the highest volume from the Organization since the autumn of 2008, and this rise in production came amid a continuous recovery in Libyan production which added 250,000 barrels a day of this whole increase.

OPEC’s report showed that demand in the global economy increased more than expected which forced the organization to increase its production more than it is supposed to at 30.000 million barrels a day, in order to meet global demand on crude oil.

Crude oil would be so volatile today ahead of rate decisions from ECB and BoE which are expected to maintain their monetary stance after previous easing and providing liquidity to the economies in order to support growth and fight the effect of the debt crisis.

On the other hand, investors are eagerly waiting for Greece’s debt swap deal today, where so far hopes are surrounding this deal as there is no other option for investors but to accept this deal and agree on almost 75% loss on the current value of their Greek holdings.