Crude hikes ahead of the U.S. jobs report
Crude oil l returns to the upside trend today as it rose on news that middle east oil supply would shrink with tightening conditions in Iran, where the jobs report may show a strong labor sector in the world largest economy in November. More tensions in Iran is taking crude to the upside as it increase speculation that Middle East supply may shrink if more sanctions would be imposed on OPEC's second largest exporter, as protesters attacked the British embassy which forced U.K. to ask Iran to close its embassy in U.K., and more sanctions are likely t be imposed on Iran by major economies led by U.S. Crude opened today's session at $100.02 and reached so far a high of $101.06 where it recorded a low of $99.88, and it is currently trading positively around $100.90, where it fluctuated heavily yesterday amid mixed factors. On the other hand, the world biggest economy and biggest oil consumer is expected to show improvement in its labor sector during November, as the Nonfarm payroll report may show around 125 thousand jobs has been added in the economy. This report has a huge effect on global market as it give signs over the U.S. economy and its recovery pace, and a stronger economy would indeed affect the global economy positively, and investors would neglect the European debt crisis and its effect on the global economy for a while. However, crude declined yesterday amid high uncertainty around the globe amid dark picture for Europe's future, where next week would be the key week for markets, as the European summit on December 9 would come up with solutions for the European debt crisis, but if not, huge losses among markets will happen. although, the main positive factor that kept crude above $100 level is ISM manufacturing index for November, where the performance of the U.S. manufacturing sector improved beyond expectations to 52.7 from the previous of 50.8. Volatility is dominating crude trading and other trading at the end of the week where investors usually are willing to close their positions in order to avoid any change in market's direction over the weekend, which may happen if any leader especially in Europe, announce any decision that may raise the optimism or drive markets to the downside. Crude will fluctuate heavily today ahead of the Nonfarm payroll report, but it is actually showing a strong upside momentum on the back of the report, and the unknown future for middle east supply, also, high demand on oil from emerging markets especially in Asia, is offsetting the negative effect from deepening crisis in Europe.
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