|News||Crude oil consolidating ahead of ISDA and Jobs report|
|Analysis||Crude oil is consolidating at opening levels and holding the gains supported by the upside momentum from the successful debt swap deal. Eyes now headed into the decision whether a credit event is triggered ahead of the key U.S. jobs report.|
Crude oil is trading around its opening level at $106.80 after it reached a high of $107.29 and a low of $106.54 a barrel. The choppy trading with the end of the week and ahead of key data across the board is powering the dollar which is stripping crude of upside momentum; the dollar index moved to the high of 79.40 from the opening level at 79.12.
Crude oil is trying to continue its three days upside rally as it found strong support from different factors. Eased fear in Europe after Greece secured the bond swap with good participation from the private sector that agreed on the deal. Greece so far averted outright default and secured the second bailout from the EU and IMF, nevertheless the eyes are now on the credit default swaps and whether this swap deal with the CACs activated a credit event.
Investors are focusing on the International Swaps and Derivatives Association which will hold a meeting today to determine whether it qualifies as a credit event, which would require a payout to those who hold credit default swaps as insurance to protect against a Greek default.
We also have the U.S. jobs report which is widely awaited by global markets as a strong labor sector in the world’s largest economy will support the risk appetite for sure and keep the oil gains seen on improved demand prospects.
So first eyes will be on ISDA as we said which could push the market upwards by denying a credit event, however, the association may hit the sentiment and erase any previous optimism if it does qualify the swap as a credit event, where we might see a bear market after that.