Crude rises backed by a weakening dollar
Crude oil is moving to the upside today since the opening of the session correcting some of yesterday's losses, due to the weakening dollar, but the deepening debt crisis is still weighing on confidence despite hopes that the European leaders will contain the crisis from spreading. Fears and concerns remain evident in markets that the world economy is heading into another recession, as a fragile pace of recovery and deepening debt crisis in Europe are putting more negative pressures on the outlook for the economy. Oil for November delivery is currently trading around $82.10 a barrel after recording so far a high of $82.15 and a low of $79.62, since the opening level at $80.69 Crude declined yesterday after pessimistic data from the U.S., which pressured oil negatively amid rising fears over the pace of growth in U.S., also, the U.S. Energy Department reported an increase is oil inventories last week due to weakening demand. The EIA report showed that the U.S commercial crude oil inventories increased by 1.9 million barrels from the previous week. At 341.0 million barrels, U.S. crude oil inventories are above the upper limit of the average range for this time of year. Total motor gasoline inventories increased by 0.8 million barrels last week and are upper limit of the average range. In Europe, leaders are struggling to contain the crisis and prevent a Greek default, more members of the Euro Zone approved expanding the EFSF's abilities in order to support debt laden nations and the European economy, and today, we are waiting the German parliament to pass these measures despite the opposition there. Investors are looking for any data that may help to contain the deepening debt crisis that affects growth, any signs from leaders will help investors get back their confidence, although, we saw upside momentum that pushed crude prices before the German vote. Volatility may remain evident in markets ahead of confidence data that will be released from Euro Zone along with the German vote and most importantly U.S. growth figures. The focus shifts to the United States today, as they will release the second quarter GDP reading along with other key fundamentals that may ease fears over the U.S. economy if the upside revision was confirmed with upbeat jobless claims. The weakening dollar today helps crude to get its upside momentum despite the deepening debt crisis in Europe and the sluggish growth in U.S., after yesterday's data that showed a decline in durable goods last month. The dollar index, which tracks the dollar movements versus a basket of major currencies, edged down to a low of 77.54 compared with the day's opening level of 78.03, where it recorded a high of 78.15 and it is currently trading around 77.57. Volatility may appear in today's trading ahead of the U.S. GDP figures and other fundamentals, along with the German parliament vote for EFSF expanding program.