Crude oil fell in New York recording its third weekly decline, as fears from the fall in financial markets and its ability to recover and the economic downturn is in its worst cases during this phase, especially as the vision is not clear after the U.S. credit rating downgrade although it led to the downfall of the global financial markets but fear will be dominating the situation in the coming period.
Light sweet crude oil for September opened today at $85.52 a barrel recording the intraday high at $85.73 a barrel and a low of $84.00 a barrel and is currently trading around $85.16 a barrel.
The USDIX which measures the performance of the green currency against other six major currencies rose today, giving the oil another reason to drop. The USDIX opened today at 74.53 recording the highest at 74.88 and the lowest at 74.46 and is currently trading around 74.69.
Meanwhile, in the middle of all these changes and the blur outlook, talks are set to take place between Germany and France to discuss the worsening debt crisis, especially as the speculation now reached France.
Returning to the United States which witnessed many crises from high unemployment to the debt ceiling crisis and it repercussions, now we get to the trade deficit as it widened by 4.4% to $53.1 million during June compared to $50.8 million during the previous month, on the other hand according to the Ministry of Commerce exports dropped by 2.3% which is the largest drop since January 2009.
On the other hand, a report today may shows a decline in the manufacturing sector in the euro area as well as a contraction in Greece, but a report yesterday showed that applications for U.S. unemployment benefits unexpectedly slid to the lowest in four months, which pushed oil to the upside.
The sentiment remains fragile and the weakening outlook for the recovery remains strong downside pressure on crude, nevertheless, the upside correction might be needed and will be reflected in choppy trading in the coming period.
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