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| News |
EIA Report |
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| Previous |
-2.3 Million Barrels |
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| Forecast |
1.5 Million Barrels |
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| Analysis |
Crude oil futures started the day with volatility and
downside tendencies as the contracts traded in a very tight
range ahead of key data from the US with supply figures and
the Feds rate decision. Crude is currently trading around
$111.86 a barrel down off the high at $112.45 and above the
lows at $111.70 per barrel. Crude also traded in a tight
range yesterday and ended lower by 7 cents at $112.21 per
barrel. The market is jittery ahead of the FOMC rate decision
and the new projections awaited from Bernanke today. The bets
that the QEII is coming to an end is support for the dollar,
while any downbeat comments from Bernanke on the outlook for
growth and pressure from rising commodity prices will surely
pressure crude to the downside. Saudi comments yesterday
signaled the discomfort from high oil prices and the effect
on economic growth, while Timothy Geithner seconded the
option by calling them an obstacle to economic growth. Supply
data are also under the focus today. The American Petroleum
Institute (
API
) said yesterday the crude stockpiles rose the most in four
weeks while gasoline inventories dropped for the tenth
consecutive week. The EIA report is also expected to report a
buildup in crude inventories today by 1.5 million barrels in
the week ending April 22; gasoline inventories are expected
with 1.0 million barrel drop. With downbeat markets over
rising prices the focus will be on the crude buildup, while
an upbeat sentiment will focus on the decline in gasoline
inventories amid the focus summer driving season. High
volatility is expected to prevail for crude today and for the
rest of the week. We have durable goods orders from the US
expected with a rise, the EIA report and then the FOMC
decision and Bernanke's press conference. Above all that, for
the rest of the week we have GDP figures from the US and
spending data and any weak signals will be a strong downside
pressure on crude. The overall outlook remains bullish unless
the data was a surprise and indeed worse than
expectations. |
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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.