|News||Crude joins the downside correctional wave|
|Analysis||Crude declines today erasing all gains that achieved yesterday as the dollar the getting stronger forcing the commodity to decline, especially that fears in Europe have shifted from Greece to other debt laden nations such as Portugal which may call for help, meanwhile, fears over global oil supplies eased amid biggest oil suppliers efforts.|
Crude oil opened today’s session at $108.31 and pushed lower to reach so far a low of $107.53, where it is currently trading around $107.95 a barrel.
Crude oil is unable to find any positive factor that could push the commodity upwards especially after yesterday’s rally which will be followed today by a downside correctional wave that we can see right now taking crude to the downside.
Yesterday, crude got the strength to achieve gains from the U.S. dollar which declined sharply clearing the way for crude to rise especially that the economic agenda is empty allowing minor factors to dominate the market’s trend.
The effect from easing tensions on crude supplies we can see it today, as OPEC’s largest member Saudi Arabia is trying to halt hiking oil prices and force the commodity to decline as the country raised its exports in January, while speculation now that it would raise its output of crude oil and cover any shortage from Iran as it previously promised.
In general, crude oil still overpriced especially that negotiations are back between Iran and the west which put aside all speculation of a military intervention at the current time, which means that crude oil should decline more and more and get back to its normal price as we all know how bad it is for economies that oil stays in these high levels.
The IMF Managing Director Christine Lagarde warned yesterday that rising oil prices is becoming a threat to global economic growth, especially to emerging economies, which have been leading growth in oil demand, where she sees hopeful signs that the world economy is stabilizing, but risks are exist too.
All in all, crude oil will likely continue this downside correctional wave today but volatility may appear amid lack of major factors that could affect crude strongly, however, eyes will be towards debt laden nations in Europe as investors are concerned over Portugal which may become the next Greece.