Oil is up to a fresh new intraday record and the dollar is hitting record lows across the board! Expectations of recession and stagflation in the world's largest economy now sunk deep into investors' sentiment; markets are discarding inflation and locking in further extensive easing by the feds as the likelihood for them to pay attention to pipeline pressures now seem slight as the economy driven by the housing sprawl is still posing further downside pressures.
Either or, both scenarios mean higher crude at the time, as discarding dampened demand prospects investors rushed into commodities from both angles, one a weaker dollar with potential further fall, and the other is a hedge against inflation and both have provided the oil with the needed momentum to surge to the upside.
April's crude contracts ended yesterday up $1.65 closing above the psychological level at $100.88 reaching the record intraday high of $101.43 per barrel; the gain of 1.7% and settling at those levels was the highest close when trading began back in 1983.
Oil continues the upside wave today, as investors are rushing more and more into commodities; trading today was tight ranged until now yet well above $101 levels, opening in Asia today at $101.20 setting the high and the low near at $101.35 and 101.00 respectively. The oil's historic new range of trade accompanied others in the market as the sentiment is clearly to a bearish greenback; the euro touched a fresh record high today since the currency was introduced in 1999 at $1.5056 after a long awaited pause to see that successful breach to the psychological $1.50, on the other hand the companion commodity to oil, the yellow precious surged to record also a new historic high at $957.65 per ounce; meanwhile despite the surging appetite for investors on currencies and commodities highlighted by US recessionary fears Asian stocks managed to hit a fresh six-week hugh.
Upside pressures on crude for now overweigh all depressing factors combined to the rising upheaval; speculative longs on oil are no longer the only moving momentum as more investors rush into the oil market as it is signaling further upside targets as is, while OPEC upcoming meeting is expected to result in an 0.6% reduction to the organizations output capacity, despite the economic balance of supply and demand in oil markets nowadays, all consumers nations are pleading with the organization to supply further in hope to restrain the black stallion as its weight on economies is dampening growth prospects and raising headline inflation.
The U.S economy has been leaking pour fundamentals from all over, wholesale inflation leaped yesterday combined with a five-year low consumer confidence, while Standard & Poor's home prices index fell in the last three months of 2007 recording it's sharpest quarterly drop in the index's history, further confirmations that the agonizing burst in the properties market is far from over.
Solitude is not even sought from expectations for today's EIA report from the crumbling economy; commercial crude inventories are expected to set their seventh weekly consecutive rise, they are forecasted to have risen 2.4 million barrels last week, while gasoline stocks are to gain 0.4 million barrel; meanwhile the projected fall in heating oil is the focal concern amid the cold weather in the Midwest and Northwest as they are to fall 1.8 million barrels.
Upside targets for oil are now valid as greenback is further sliding to the downside, while the surge is seen across the board. Federal Reserve Chairman, Mr. Bernanke, is awaited deliver his semi-annual testimony against the congress, that will be a major market mover today especially after vice Kohn yesterday added to markets expectations that the Feds are now in the position to focus on growth and discard inflationary threats, signaling by that to markets extensive cuts to come next month by the feds.