NewsEIA report
Previous0.8 million barrels
Forecast1.6 million barrels
AnalysisCrude oil fluctuated heavily yesterday to stay nearly where it opened the session amid mixed factors, where it is biased to downside today amid negative factors that is forcing the commodity to decline, as the dollar is getting stronger every single minute and bad data released from Japan showed a weakening industrial production.

Crude oil opened today’s session at $106.71 recording so far a low of $106.29 and a high of $106.88, where it is currently trading around $106.47 a barrel, where the USDIX is pushing negatively as it rose from the opening level at 80.12 to reach so far a high of 80.43.

Amid all negative factors that we see in the market but the crude is struggling hardly to resist these factors but to no avail, as it seems to be losing its strong upside momentum that gained amid fears over oil supplies and hopes in Europe.

And we can here point to negative factors that could be able to force crude to decline since positive factors that continued to provide the commodity with upside momentum is well known, as we believe that tensions between Iran and the west is the main factor behind pushing crude to these very high prices, but we cannot neglect the positive effect from Europe after signs of capability to get out the crisis appeared.

  And now, after we mentioned the two main positive factors that pushed crude to these levels, we can look to the negative ones such as the stronger dollar which managed to push crude to the downside after it won all battles against other currencies including the Euro for two consecutive days.

Talking about negative factors, we can see how demand is getting weak in the states, as the  API showed that US inventories rose 2.8 million barrels in the week ended March 9, while supplies of distillates declined 3.5 million barrels.

Today, the EIA report is expected to show an increase of around 1.6 million barrels for US crude stockpiles, after it rose by 0.8 million barrels last reading, which gives signs that oil demand in the world’s largest oil consumer is getting weaker.

Where in the world’s second largest economy and oil consumer China, its economy is expected to grow 8.3% in 2012 according to Standard & Poor's credit rating agency’s forecast which is more than what Beijing's forecasted at 7.5%, fueled by local governments' penchant for growth and policymakers' increasing support to small and midsize enterprises.

In general, low trading would dominate ahead of major fundamentals which we are waiting for, as UK is supposed to release its jobs report with a steady unemployment is expected, on the other hand, the Euro zone economy will release its industrial production figures along with inflation numbers.

Investors as we said will remain cautious before releasing these data and especially before the EIA report which will be closely monitored by markets to see how much inventories rose last week, which will trigger high volatility before releasing if nothing major happens that would take the commodity upwards or downwards.