Crude oil recouped some of the losses today in early Asian trading supported by a weaker dollar, also affected by the EIA report which showed a drop in the U.S. crude stockpiles, signaling that demand in the world's oil consumer may not falter, despite this gain, oil prices dropped nearly by 14% over the past month as concerns about the health of the global economy created a negative outlook for energy demand.
Light sweet crude oil opened today at $81.91 a barrel recording the intraday high at $83.97 a barrel and a low of $81.13 a barrel and is currently trading around $83.62 a barrel.
On the other hand, the dollar index which measurers the performance of the green currency against six other major currencies dropped today as it opened at 74.78 recording the highest at 74.92 and the lowest at 74.32 and is currently trading around 74.52.
The EIA report yesterday showed that the U.S. commercial crude oil inventories decreased by 5.2 million barrels from the previous week. At 349.8 million barrels, U.S. crude oil inventories are slightly above the upper limit of the average range for this time of year. Total motor gasoline inventories decreased by 1.6 million barrels last week and are upper limit of the average range.
Still the jittery situation is predominant where risks surrounding the U.S. along with the sluggish global growth with hammered the outlook for crude demand. The Federal Open Market Committee decided to keep its benchmark interest rate unchanged and low between 0.0% and 0.25% which will be held at exceptionally low level through at least mid-2013 due to the current weaker than expected growth, confirming that the world's leading economy growth was significantly slower this year.
We should note that OPEC, which is responsible for about 40% of world oil supply, said in its monthly market report that it cut its oil-demand forecasts for 2011 and next year as the global economic recovery loses momentum, also the group reduced its consumption estimate for this year by 150,000 barrels a day.
The light fundamentals load today from major economies will keep choppy trading evident as investors assess the impact of the moves from central banks; therefore, volatility and mixed sentiment will dominant in the markets with fears and uncertainty over the outlook for the lost confidence and the global economic stability.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
