|News||Crude hovers around the opening level|
|Analysis||The choppy trading on crude oil comes as traders are staying on the sidelines after the commodity declined sharply yesterday affected by higher possibility to release the emergency oil supplies from Europe and U.S. High uncertainty in Europe ahead of Finance ministers’ meeting and Spain budget plan triggers volatility as well.|
The black gold is trading now near the opening level at $103.33 after it climbed to the high of $103.57 and recorded a low of $103.15. While the USDIX opened the session at 79.09 reaching so far a low of 78.72.
Crude oil fluctuates heavily now as mixed factors are affecting the commodity. On one hand, Europeans are optimistic that finance ministers that started a meeting today would agree on expanding the firepower of emergency lending funds to near 940 billion Euros.
This optimism in Europe is pushing the common currency to the upside which adds negative pressure to the dollar; accordingly, this weakening dollar is providing the commodity with a bullish momentum that helps in offsetting other negative factors that weighed on oil.
On the other hand, a strong downside pressure managed to push crude sharply downside below $104.00 which is a strong support technically, as France said that there's a good chance the United States and Europe will agree to release oil reserves into the market to drive down crude prices, but discussions were still ongoing.
This statement has affected crude negatively bringing down oil prices sharply, and we can see its effect even today as crude struggles around the opening level despite the weakness of the U.S. dollar which supposed to push crude upwards.
However, eyes today will target Spain’s budget plan which will introduce more austerity measures in a way to cut the huge budget deficit, as the PM is facing outside pressure to cut the budget deficit, but at the same time, the Spanish people are strongly opposing these austerity measures.
Volatility will be high today until we see results from Euro-zone’s Finance ministers meeting, however, crude might be pushed higher if ministers saturated investors’ hopes and take a decision of expanding the firepower of emergency funds.
On the queue, the flash CPI estimate from Euro zone which is expected to come lower than the previous reading which easing upside pressures on inflation, as the reading may show that prices climbed by 2.5% in March compared by 2.7% in the previous month. Also, the growth pace in Canada might be cooled down in January.