Crude recovering after heavy selloff
The market is recovering from yesterday's heavy selloff that pressured crude to a fresh six-week low; the end of the week recovery was expected as the wide selloff on deepening recession fears starts to ease helping the market recovery some of the heavy weekly losses. Crude oil futures for November settlement started the day at $80.40 recording the high of $81.81 and the low of $79.70 and currently hovering around $80.86 higher by 0.4%. The market is refocusing on the facts at hand, where surely the slowdown is confirmed, yet how deep of a recession is the market printing! Investors are just trying to stay ahead of the turmoil and with the heavy selling seen yesterday, investors realized that no one is safe! What we are seeing today is merely a recovery to the decline seen yesterday and mainly all the week. The dollar is also correcting the bullish rally after it hit the highest since January. The dollar index is currently trading around 78.18 down nearly 0.25%. With the needed relief to the market, the G20 was support for the market to recover. The Group of 20 finance chiefs pledged to take the needed measures to address the rising risks to the global economy. In a statement last night in Washington the G20 said they are "committed to a strong and coordinated international response to address the renewed challenges facing the global economy" which slightly helped ease the predominant fear of recession. We can surely see the strain evident on the market and those words will not be enough to clamp the pessimism and the market is only pretended to respond today on a needed relief ahead of the weekend which will see the comeback again to another hectic week! Oil is very sensitive for sure to the state of the global economy, and especially the biggest consumer, and surely the fear of recession and continued slowing growth will pressure consumption on crude to decline. We need to keep the eye on OPEC that said it will take the decision whether to cut supply as they monitor the global recovery and the recovery in Libya's production which might offset some of the negative pressure and prevent oil from faltering below the cartel's desired target. More volatility is expected for today as investors focus on the fragile sentiment and cautious trading today ahead of the weekend especially with the lack of scheduled releases from major economies today.
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