|News||Crude tries to correct some of yesterday's losses|
|Analysis||Crude oil is trying to recover from yesterday’s huge losses but in fact, we cannot find a strong factor that could push the commodity strongly upside at the current time, as the only thing that is helping crude now is the weakness of the dollar.|
Crude oil opened today’s session at $105.57 reaching a low of $105.40 and so far a high of $106.07, where it is currently trading around $106.04 a barrel.
The U.S. dollar declines sharply today extending its weekly losses which relieved crude and helped it to achieve some gains following the Euro which joined a strong upside wave today erasing the past three days losses.
However, we may see heavy fluctuations today amid lack of fundamentals from major economies, and it is the end of the week where investors prefer to close their positions and avoid any unexpected losses.
By looking at the weekly chart, we can see how crude declined which reflects not just the bad data from major economies, but the effectiveness of global leaders’ efforts that aimed to bring crude back to its normal levels, led by Saudi Arabia which showed its readiness for any immediate increase in oil production.
Yesterday, Europe played a significant role in pushing crude downwards as pessimism has dominated the continent’s sentiment after issuing the bad data that signaled a deep contraction in the economy’s sectors, which in a way or another assured that Euro zone’s economy is heading to a deep recession this half of the year.
The negative effect from Europe has countered other positive factors that could help crude yesterday, as the International Energy Agency (IEA) said that it isn’t planning for a coordinated release of emergency oil stockpiles among its 28 member nations.
As we heard rumors this week that the IEA may inject the emergency crude inventories to halt the general hike in oil prices which pushed crude downwards, but denying these rumors yesterday was an effective factor that pushed the commodity from the lowest it achieved at $104.50 to close the session at $105.57.
With lack of fundamentals and the absence of major factors that could affect crude, it will be strongly related to the dollar today, where IEA’s effect may continue pushing crude positively but all these factors are not able to push crude outside the range that contained the commodity for a while.
Join the Discussion