|News||Crude consolidates ahead of major data|
|Analysis||Crude oil fluctuates heavily now after it declined sharply yesterday on rising U.S. inventories which pushed the commodity strongly to the downside, crude is looking now for a clue to hold its position and resist the bearish wave which took it for two consecutive days.|
Crude oil opened today’s session at $105.50 to reach so far a high of $105.68 and a low of $105.11, where it is currently trading around 105.65, after yesterday it declined from the opening at $106.75 to close the session at $105.50.
The EIA report showed that U.S commercial crude oil inventories increased by 7.1 million barrels from the previous week comparing to the previous reading which reported a drop by 1.2 million barrels. In addition, distillate fuel inventories decreased by 0.7 million barrels last week and are in the middle limit of the average range for this time of year.
The rising U.S. inventories have pressured the commodity negatively forcing it decline, as it trigged fears among investors that the demand is weakening in the world’s biggest oil consumer which is so negative for crude.
Before this downside pressure from EIA report, global efforts to halt the general upside trend for crude started to appear, as the United States asked France to join it over a possible release for emergency crude stockpiles and force oil prices to decline.
However, crude would be so volatile today ahead of very important data that are on the queue which attracts investors’ attention, first in Europe which will release the confidence figures during March and it would be closely monitored by investors to see the actual sentiment amid the current hard conditions.
In the U.S., the third reading for fourth quarter GDP will be released today with expectations to confirm the previous reading which showed a strong growth pace by 3.0%. However, if it revised higher, we will see an optimism wave will invade financial markets.
In general, the sentiment is improving today with hopes in Europe that float ahead of tomorrow’s crucial meeting for finance ministers which would expand the firepower for of lending funds to 940 billion Euros. Encouraging figures from Europe and the States would certainly enhance the market sentiment.
These facts that we referred to may help crude to hold its ground and neglect other negative factors, especially if the U.S. GDP in fourth quarter would be revised higher which will push the commodity strongly upwards.