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Crude drops near $78 per barrel pressured by profit-taking
following the sentiment reversal |
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| Forecast |
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| Analysis |
Crude fell today to currently stabilize around $78 per
barrel after the ascend witnessed in the past few days, where
this morning's descend was pressured by the depressed sentiment
n the market fueling profit-taking. Equities fell today as the
bullishness that dominated markets yesterday from Chinese plans
to ease the Yuan's peg to the Dollar faded. Crude yesterday was
affected by the drop witnessed in global indices after renewed
fears in markets regarding the sovereign debt crisis in Europe
and its expected negative effect it may have on the country's
growth. On the other hand, Goldman Sachs today reduced its
expectations regarding crude oil this year, due to the global
economy's median growth expectations for 4.9% this year. Crude
expectations have been reduced throughout the first three
months of this year to $87 per barrel, compared to previous
expectations of $96 per barrel. Moreover, crude futures gained
to 78.924 yesterday due to support from the Chinese central
bank's statement regarding beginning to loosen up ties between
the Yuan and dollar; thus helping support demand on crude. In
addition, Societe Generale expects the Yuan to gain between 3 -
5% until the end of the pending year, where this ascend is
expected to leave a negative effect on Chinese exports.
Meanwhile, demand on Chinese crude has skyrocketed and is
expected to prevail as expectations keep increasing regarding
the Chinese economic growth at a faster pace compared to other
economies throughout the pending year with a median of 10% on
an annual average. Crude opened yesterday around $78.65
recordings highest around $79.92 and lowest around $77.70 per
barrel, where it managed to close trading around $78.05 per
barrel. The S&P GSCI index closed yesterday around 512.83
after gaining 2.27 points; whereas the RJ/CRB index gained by
0.76 points to close around 263.69. As for NYMEX as of 02:15
EST; motor gasoline fell to $213.540 per gallon by $0.740;
heating is trading around $213.210 per gallon after dropping by
$1.380; whereas natural gas also receded by $0.023 to record
$4.850 per 1000 cubic feet. In London, Brent recorded a drop by
$0.720 to record $78.100. Crude managed to open today around
$78.10 per barrel recording its highest around $78.65 and
lowest around $77.50 per barrel, while it is currently trading
around $78.05 per barrel. |
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.