Mount Everest here we come!!! Crude is still trading within the upside upheaval and again surging to new records high of a plummeting dollar that's igniting funds flow into crude markets. Crude contracts for April settlement surged to a new intraday and closing high of $105.97 and $105.47 per barrel respectively; the contract ended up 95 cents after surging five dollars the previous session on Wednesday after the drawback in US crude stockpiles.
Speculation surely is still the main upside pressure, supported most dominantly by the records low the dollar is trading at, the euro leaped to an all new high surpassing $1.54 especially after Mr. Trichet confirmed that the ECB's predominant concern remains tilted to anchoring inflation expectations on the medium to long term; while on the commodities side gold inched above $990 and still heading to the $1000 set target and even beyond.
Expectations of 75 bp cut by the feds next week is fueling further dollar selling, especially with expectations of weak labor data today that according to market expectations will miss median forecasts and fall further than expectations, as the unemployment rate is to incline to 5% once again. Equity markets are still on the other hand jittery as worries revolving bond insurers might trigger second round of excessive writedowns in financial sectors.
This led oil prices to hold strong today to its new set range of trade, as in Asian trade oil set the high slightly lower than yesterday's record at $105.68 while the lowest was still near $105 as oil is holding steady above trading now near $105.50s per barrel.
Geopolitical tension in South America is still forcing markets' sighs as they still can grasp if it's just a set back or journey to collateral damage. Venezuela deployed forces near the Colombian boarder siding with Ecuador, the smallest producer among OPEC, after the launched raid from Colombian rebels into its boarders, which added the tension after the bombing of a major line that carries oil to an export port in Ecuador.
Falling US crude stock piles for the first time in eight weeks have had its toll on markets as well, noting that it came in coherence with OPEC's decision to keep output unchanged remarking to US mismanagement and adequacy of supply in the market pointing to their inventory levels.
Analyst projected a rise of 2.4 million barrels in crude stockpiles which came with a decline of 3.1 million barrel, while a large drop was seen in distillates recording a large fall of 4.8 million barrels as the cold weather in the Northeast ignited demand on heating oil. Meanwhile gasoline stocks are still well above the average ahead of the summer driving demand season as they are still at a 14-year high and above the five-year historical average, they rose 1.66 million barrels to 234.3 million barrels in the week ended Feb. 29.
The upside heading is still seemingly far from over and the $107 levels are now the upcoming targets for crude oil, watch out for the labor report from the US today, as the god father of all fundamentals will defiantly state its mark, while from other angles donÃ¢â‚¬â„¢t let your guard down as profit taking at the end of the week might also move markets strongly as non major was seen at those high levelsÃ¢â‚¬Â¦