Crude oil sell-off continues below $100 a barrel!
Crude is running downhill and the slump continues after diving 10% on Thursday alone sending the black gold below the three digit areas of $100 a barrel! The freefall continues into Friday with the selloff extending in what seems the biggest and strongest correction in two years after crude slumped from around the record $147 a barrel. Crude is so far down about 16% and we are not still at the end of Friday and not even close considering the nonfarm payrolls that the market awaits! Crude yesterday alone slumped nearly 10% to settle below $100 at $99.60 a barrel. On Friday today, the decline extended and crude continued the rout so far recording the low of $94.62 a barrel, and currently hovering around $94.80 a barrel down more than 4% and below the opening high at $100.93 a barrel. The commodities rout is extending on signs of slowing growth, the huge funds selloff and liquidations after the losses mounted in silver and extended to equities which were very bearish on sensitive crude. The selloff and the bearish sentiment instantly powered the dollar to rally which further extended the losses for commodities. The dollar index that gauges greenback's performance versus its six major trading partners continues the upside rally today and moving into the first weekly gain in six with so far 1.7%. The index is trading now around 74.24 recording the high of 74.25 and the low of 73.94. We can see the jitters extending in the market over the slowing global recovery, which even the ECB hinted yesterday that further rise in commodity prices is downside pressure on the outlook, joining in the judgment its peers. The sentiment has been shifting bearish this week and the ECB was the last straw after they assured to markets they are not in a hurry to raise rates assuring that growth is what we need to focus on! Therefore, the selloff continued to be dominant from liquidation from one side to fears on the other, with the focus on the US Jobs report. The forecasts for job gains were downgraded to only 185,000 from as high as 195,000 earlier this week. The expectations for the unemployment rate remain steady at 8.8%. We saw the ADP lower than expected, employment index in the ISM manufacturing and services eased, and the four-week jobless claims average rose, all signaling a lackluster report for today. The bearishness is dominant and with the break below $100 areas we can surely see the correction dominant for now and especially if the data today come far worse than expected which might carry crude to its worst weekly slump on record!