|News||Crude joins the downside correctional wave|
|Analysis||Crude oil struggles today to keep its grounds after it rose significantly yesterday supported mainly by good U.S. data that helped the commodity to regain losses that achieved before, as the manufacturing sector in the world biggest economy and oil consumer seems to be recovering well.|
The black gold opened today’s session at $105.11 and recorded a high of $105.15 and a lo of $104.65, where it is currently trading around $104.68 a barrel.
With high volatility, crude is biased bearishly today in a correctional wave amid lack of major fundamentals as the market is waiting for the FOMC minutes which will give signs if U.S. policy makers are willing to stimulate the economy more or they will wait at the current time to see more confirmations from the economy.
Yesterday, crude rebounded strongly to the upside after the ISM manufacturing affirmed a strong recovery pace in manufacturing sector at least. As in March, manufacturing grew by 53.4 compared to previous month’s performance at 52.4.
Data from the United States are closely monitored at the current time looking for any sign that could indicate the next monetary step by the Federal Reserve Bank which signaled that no stimulus is needed for the economy at the current time. However, no one knows actually what U.S. policy makers are thinking, as today’s FOMC minutes will be the confirmation for these doubts.
In Europe, no major changes in market trading this week except recession’s signs as most sectors in the economy contracting for more than two quarters. But the sentiment is stabilizing after Euro ministers agreed to expand the firepower of lending funds to help debt-laden nations. Eyes in Europe are headed to next step by policy makers to halt the widening debt crisis.
In general, the weakening dollar and good data from China are the reasons behind not seeing a sharp drop in crude prices, as the commodity declines slightly but not taking the full effect from the downside correctional wave.
As China’s non-manufacturing PMI (Services) in March expanded strongly to reach 58.0 compared to the previous reading at 48.4, adding signs that the world’s second largest economy is recovering well weather in manufacturing sector as we saw before or in services sector.