|News||Crude joins a downside wave|
|Analysis||Crude oil is trying to correct some of Friday’s huge gains by taking the downside trend today amid efforts from Saudi Arabia to tackle the effect from Iran as the Kingdom is taking measures to increase its oil exports, which is pushing crude to the downside at the beginning of the week.|
Crude oil opened today’s session at $107.25 recording so far a low of $106.56 and a high of $107.46, where it is currently trading around $106.78 a barrel.
The commodity rose significantly on Friday affected by different factors, as we saw how the dollar declined sharply which opened the door for crude to achieve gains at the end of the week, but today, crude is taking a downside correction wave supported mainly by higher output from OPEC’s biggest producer.
Saudi Arabia’s January crude output rose 0.6% from December, where oil exports from Saudi Arabia climbed 2% in January to 7.5 million barrels a day, also, the Kingdom's exports to the United States have risen 25% to the highest level for more than two years, as Saudi Arabia is preparing to increase its oil sales to the United States.
Higher output from Saudi Arabia or other OPEC’s members is taking crude downwards neglecting any other negative factor especially that the U.S. dollar is getting stronger at the beginning of the week providing the commodity with a downside momentum as well.
Lack of fundamentals today triggers volatility in crude’s trading but it will continue in its downside bias amid signs of higher output of crude from OPEC’s members, and in a correctional move after Friday’s huge gains.
Eyes will be looking today for any developments in Europe especially amid the auction which will be held by Credit default swaps’ dealers in order to settle $3.2 billion of Greek bond insurance triggered by the nation’s debt restructuring.
On the same side, worries are intensifying to surround Portugal as investors are concerned that Portugal may follow Greece in its debt restructuring plan and try to reduce its debt burden, which would triggers fears and hit the continent’s sentiment.