Crude oil continued to rise during most of last week's trading, and a barrel of oil almost reached $82. However, close to the weekend, prices of oil dropped, and a barrel of crude oil is currently traded for less than $80 a barrel.
The rising trend of crude oil, which took place on the first half of last week, came mainly as a result of the weak Dollar. Oil is valued in Dollars and thus tends to strengthen when the Dollar drops. However, later on the week, the prices of oil saw a sudden drop. The main reason for the decline in oil prices seems to be the increasing concerns about global recovery, especially regarding the U.S economy. Current expectations are that the economic recovery in the U.S will elevate demand for oil.
However, the unsatisfying data received from the U.S economy has questioned the reliability of economic recovery, and increased worries that demand for oil may not rise during the first half of 2010. As long as these concerns will remain, crude may fail to see higher prices than $80 a barrel.
As for the week ahead, traders are advised to continue follow the major economic publications from the U.S and the Euro-Zone, as they seems to have the strongest effect on oil's value. In addition, traders should follow the U.S Crude Oil Inventories on Wednesday, as this indicator tends to have an immediate impact on crude oil's trading.