|News||Crude is volatile ahead of the FOMC|
|Analysis||Crude oil fluctuates heavily today ahead of the FOMC today which will announce if the FEDs sees more stimulus is needed for the economy, but it is unlikely to happen amid good signs of recovery, on the other hand, it found a kind of support yesterday that helped it in erasing some of the losses after Euro finance ministers agreed the second bailout for Greece.|
Crude oil opened today’s session at $106.53 and reached a high of $107.09 and a low of $106.48, where it is currently trading around $106.82 a barrel.
Volatility that dominates crude trading is normal amid mixed factors that affect the commodity, as Euro finance ministers have agreed on Greece second bailout by 130 billion Euros which pushed the market and improved the sentiment.
But on the other hand, they shifted all the fears and worries that were surrounding Greece to Spain, after the country failed to achieve the budget deficit target and put a new budget goal at 5.8% from the GDP, but the ministers called Spain to reach the deficit at 5.3%.
It is expected that volatility appear today and it would be high, as major fundamentals are on the queue weather from Europe or from the world’s largest economy and oil consumer, as Germany will release its sentiment and confidence figures which would be monitored by investors to see how’s the confidence in February after leaders’ efforts to contain and fight the crisis and its effects.
However, comments from EU leaders will be taken into consideration as eyes are now heading to other problems after Greece is secured at the current time, where investors are looking for faster growth pace and where the other debt laden nations such as Spain and Portugal are going.
Shifting now to what would move crude oil easily is the United States, as it would release the retail sales figures with expectations the advance retail sales could have improved by 1.1% from 0.4% in February, which is representing the actual spending of consumer, and it would affect crude significantly.
After these heavy fundamentals, markets will eagerly awaiting the Federal Open Market Committee (FOMC) rate decision where policy makers are projected to leave rates near zero level (0.0%-0.25%), and no more stimulus would be needed as the FED’s governor signaled before and amid signs of strong recovery.
Although, the International Energy Forum, consisting of a group of nations that account more than 90% of global oil and gas supply and demand, will discuss oil price volatility, renewable sources of energy, and energy poverty in a two-day meeting in Kuwait that started today.