|News||Crude consolidates around the opening level|
|Analysis||Crude oil is creeping down in correctional move after yesterday it turned from losses into gains when the FED’s Chairman made comments that indicated another quantitative easing is close in order to support the world’s biggest economy, which pushed the dollar lower adding upside momentum to the commodity.|
Crude oil opened today’s session at $107.09 reaching a high of $107.15 and a low of $106.66, where it is currently hovering around the opening level.
Crude oil turned into gains yesterday backed by FED’s Chairman which cut the ray of light i over the jobs sector, signaling that despite the latest encouraging signs in the economy but the jobs sector still far away from normal. This indicated that another quantitative easing is on the way to help the economy and support the labor sector in particular.
Bernanke’s comments have turned the market upside down yesterday, as investors are looking for any fact in the U.S. economy and take it as a positive sign, as they struggled so much from Europe and its crisis, and try to derive their cheerfulness from the world’s biggest economy.
Also, investors are waiting the Euro zone Finance ministers meeting on Friday which might come up with a decision to expand Europe’s emergency funds, especially after Germany retreated from its opposition stance and show a kind of acceptance in expanding the firepower of the bailout funds.
Dear reader, we cannot blame investors for these high oil prices but we can point to global leaders which led this upside rally for crude, as we all know that the main factor behind these high prices is the fear of there is not enough oil supplies to meet global demands after U.S. and allies put tight sanctions on Iran that would result at the end with no oil from OPEC’s second largest producer.
The United States is not going to pull back from its stance in tighten the screws on Iran, as investors never ruled out the military intervention possibility which is reflected on oil prices despite global efforts to halt this upside rally, but actually it eased after both renewed negotiations over the nuclear debate.
Looking at global oil supplies and factors that were behind these high oil prices, we can take a look into Sudan’s oil as hopes for a quick resumption in South Sudan oil output were faded after Sudan's President delayed a planned meeting with South Sudan due to different factors.
In general, crude consolidates around the opening level amid lack of fundamentals from major economies, which leaves crude vulnerable for minor factors today, where the FED’S positive effect remain on crude so far.