NewsOil consolidates ahead of the Easter holiday
AnalysisCrude oil is trying to hold its grounds after the strong selloff in the past two days that took the commodity sharply to the downside. The strong dollar and the unexpected heavy rise in inventories were sufficient to push oil towards $102 areas.

Crude oil opened today’s session at $102.01 to reach a high of $102.38 and a low of $101.87, where it is currently trading around $102.29 a barrel.

The big surprise was the rise in U.S. oil inventories that soared for the second consecutive week confirming the weak demand from the world’s biggest oil consumer. The EIA reported that U.S. crude inventories rose last week by 9.0 million barrels, much more than the expected 2.5 million barrels, where it rose by 7.1 million barrels in the previous week.

Also, distillate fuel inventories were unchanged last week to stay in the middle of the average range for this time of year. This report has increased the negative pressure on the commodity and played a significant role in pushing it sharply to the downside.

Among this downside pressure, the stronger dollar has been able as well to push crude negatively as the currency rebounded sharply to the upside on signs of no other round of quantitative easing on the way from the FED which signaled that the economy is improving and another round of quantitative easing might not be necessary.

On the other hand, we cannot neglect the significant role played by the ECB in pushing crude to the downside after the bank kept its monetary policy steady despite the current woes in the region, especially in Spain which is feared to be the next victim of the debt crisis.

In general, investors are eagerly awaiting Friday’s jobs report from the world’s biggest economy which is expected to show a slight decline in the added nonfarm payrolls during March at 205 thousand compared to the previous month 227,000 added jobs.

The U.S. Jobs report will be released amid Easter holiday which will start in Europe and the States on Friday till Monday, but eyes will be open and track this report which could change the whole market but the market reaction will most likely be delayed to the following week as markets return from the long weekend.

Heavy data are on the queue from Europe today which will trigger volatility before the long weekend, but the major trend for crude will remain bearish since there is nothing that could help the commodity amid rising downside pressure. However, you must take into consideration dear reader that volatility will be extremely high today with the shortened week.