|News||Crude struggles around the opening level|
|Analysis||Crude oil hovers around the opening level after it seen heavy fluctuations yesterday as it declined sharply then it retraced to correct some of these losses. This downside pressure on crude derived from uncertainty in Europe and the stronger dollar.|
Crude oil opened today’s session at $103.06 and reached a high of $103.25 and a low of $102.77, where it is currently trading around $102.96 a barrel.
The commodity couldn’t find any strong supportive factor that could help it in pushing upwards, but it been relieved lately yesterday after ECB’s official expressed his confident over Spain and said no need for outside aid for Spain as the country just need more time. This helped crude to rebound sharply from low levels erasing more than a half of morning losses.
In general, fears remain stuck in Europe as PMI’s data showed yesterday that Germany and Euro manufacturing are contracting deeper than before in April, where Euro’s services contracted deeper as well. Those factors have destroyed any hope that the Euro zone may prevent entering recession in the first half.
Also, the political unrest was a main factor behind this high uncertainty as France is facing presidential elections showing where the current president Nicolas Sarkozy failed to success in first round of elections. On the other hand, the Netherlands’ current cabinet submitted its resignation after it failed to reach agreement on how austerity measures designed to tackle the country’s national debt.
By looking at these factors, we can notice how the market relieved from this high uncertainty after ECB’s official eased concerns over Spain’s outlook, but the market remained concerned and covered by uncertainty due to factors we talked about.
As we can see how crude struggles around its opening level despite the weakening dollar, as the USDIX opened today’s session at 79.38 to drop so far to a low of 79.22