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Crude struggles around the opening level |
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Crude oil hovers around the opening level after it seen
heavy fluctuations yesterday as it declined sharply then it
retraced to correct some of these losses. This downside
pressure on crude derived from uncertainty in Europe and the
stronger dollar. Crude oil opened today's session at $103.06
and reached a high of $103.25 and a low of $102.77, where it
is currently trading around $102.96 a barrel. The commodity
couldn't find any strong supportive factor that could help it
in pushing upwards, but it been relieved lately yesterday
after ECB's official expressed his confident over Spain and
said no need for outside aid for Spain as the country just
need more time. This helped crude to rebound sharply from low
levels erasing more than a half of morning losses. In
general, fears remain stuck in Europe as PMI's data showed
yesterday that Germany and Euro manufacturing are contracting
deeper than before in April, where Euro's services contracted
deeper as well. Those factors have destroyed any hope that
the Euro zone may prevent entering recession in the first
half. Also, the political unrest was a main factor behind
this high uncertainty as France is facing presidential
elections showing where the current president Nicolas Sarkozy
failed to success in first round of elections. On the other
hand, the Netherlands' current cabinet submitted its
resignation after it failed to reach agreement on how
austerity measures designed to tackle the country's national
debt. By looking at these factors, we can notice how
the market relieved from this high uncertainty after ECB's
official eased concerns over Spain's outlook, but the market
remained concerned and covered by uncertainty due to factors
we talked about. As we can see how crude struggles around its
opening level despite the weakening dollar, as the USDIX
opened today's session at 79.38 to drop so far to a low of
79.22 |
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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.