Crude oil struggles around opening levels
Crude oil is correcting some of yesterday's losses as it rises today amid signs that the world's largest economy is still expanding with retail sales expected to rise, which added hopes that it support the sentiment and demand on oil. Crude oil is trying to erase some of yesterday's losses after pessimism spread in financial markets that EU summit did not add any positive signs that Europe could solve its crisis, where Fitch followed Moody's and said that the summit did little to ease pressure on Europe's sovereign-bond ratings. Crude oil opened today's session at $97.86 to reach a low of $97.62 and a high of $98.21, where it is currently hovering around its opening levels. Moody's, the other leading rating agency said that it will consider reviewing the whole EU members by the first quarter of next year, which means that the agency didn't see any major changes or appropriate solutions presented by the EU summit. Crude is struggling today amid a lot of negative signs from major economies except the US which might show encouraging retail sales figures today, as speculations spurred about China that it may end up using tax cuts to stimulate expansion next year, where exports growth weakens and the economic growth eased to 9.1% during last quarter, which is considered the lowest pace in more than two years. Today, the US officials may intensify their discussions on how to stimulate the economy but it is not expected to announce any monetary easing measures today as many signs are showing a good recovery pace in the economy as it expanded an annualized 2.0% in the third quarter, and hopes are growth will reach 3% in the current fourth quarter. It is not expected as we said any major announcement after the meeting today, but the Fed's may discuss a new plan to forecast the direction of short-term rates starting next year and to mention the challenges that face the economy, which will calm markets and support the confidence. On the other hand, the Iranian Oil Minister said earlier this week that the European Union "definitely" will not impose sanctions on OPEC member Iran's oil exports because such a measure would harm the global crude market, as the EU leaders called on Friday for more sanctions against Iran by the end of January. Nonetheless, crude oil is expected to show more volatility ahead of OPEC's meeting due on Wednesday, as EU considers blocking Iranian oil production which is actually pushing oil to the upside while the debt crisis and slowing global growth outlook are weighing negatively as well. Volatility will sharpen today ahead of major data that will be released by the U.S., as it is the main factor that is helping crude to maintain its current levels after yesterday's decline, as the US figures may show good retail sales in November with the start of the holiday sales, which will add positive signs on the world's biggest economy that is doing well amid challenges from the deepening debt crisis in Europe.
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