Powered By

Breaking News

Crude oil higher on FOMC minutes and contracting U.S. supplies

Publish Date23/08/2012 07:35:53 AM

Last Update23/08/2012 07:58:48 AM

Crude oil higher on FOMC minutes and contracting U.S. supplies

Crude oil extended the gains today in a three-day upside journey with more signs of quantitative easing from the FEDS which pushed up the commodity by pressuring the U.S. dollar negatively. Also, the higher than expected drop in U.S. oil stockpiles helped push oil prices higher.

Crude oil opened today’s session at $97.39 and reached a high of $98.27 and a low of $97.16, where it is currently trading around $98.11 a barrel. The USDIX opened today’s session at 81.52 to extend yesterday’s losses by reaching so far a low of 81.29.

The commodity has been supported yesterday and maintains this upside momentum in today’s trading as the U.S. dollar remains weak which opened the door for the commodity to reach as high as $98.25 a barrel.

In fact, the FOMC minutes showed that members attested once again that the economy is picking up "very gradually" and this time precisely they insisted strongly that new QE is obligatory to boost the slow speed ratio of the current revival of the economy, since the recovery tempo is gradual and slow for too long as a result of local and global unending downside pressures.

These signs were enough for investors who waited for these positive signs for a while as they see more easing from the FED is necessary and policy makers in the world’s largest economy should move to help the labor sector and the struggling economy that faces strong downside risks from Europe.

On the other hand, the EIA report showed that the U.S. crude oil inventories declined by 5.4 million barrels from the previous week much more than the expected figure at 2.5 million barrels drop. Total motor gasoline inventories decreased by 1.0 million barrels last week and are in the lower half of the average range.

The decrease in U.S. oil inventories helped the commodity sustain its upside journey surpassing all upside barriers approaching the psychological $100 barrier, especially amid more easing signs for the world’s largest oil consumer which will help the economy and increase oil demand.

Those factors were strong enough to keep crude’s strong upside momentum despite negative signs from the world’s second largest economy and oil consumer. China’s HSBC Flash Manufacturing PMI contracted deeper than the previous month at 47.8 in August compared with the previous 49.3. The continuation of negative signs from China is heating up the easing probability which is being speculated frequently by investors.

In general, it’s all about the dollar movements and the FED’s monetary stance , this is the main factor behind oil’s upside momentum, adding to this the decline of U.S. oil inventories which as we said helped the commodity in this journey.

Although, the coming is harder for crude oil and its traders as it would be volatile amid the FED’s actual stance in its next meeting, and how things are going to be in Europe. Also, we will not forget fears and jitters over global supplies and over Iran in particular.


Member Account Required
You must be registered as a member of the forums and logged into your account to post messages. If you do not have a member account, please Sign In or Register.
United States
Asia Pacific
Economic Calendar
Holiday Calendar
ECB Calendar
Feds Calendar
BoE Calendar
Boj Calendar
Top News
FX Updates
Market News
Global Highlights
Political News
Around the World
At A Glance & Video Commentaries
Market Pulse
Press Releases
About Us
Contact Us
Privacy Policy
Terms of Services

Risk Disclaimer : All information on this page is subject to change. The use of this website constitutes acceptance of our Privacy Policy and Terms of Service. Please read our Privacy Policy, Risk Disclaimer, Terms of Services and all legal disclaimers. Please note that Forex trading (OTC Trading) involves substantial risk of loss, and may not be suitable for everyone.

Opinions expressed at ICN.com are those of the individual authors and do not necessarily represent the opinion of ICN.com or its management, shareholders, affiliates and subsidiaries. ICN.com has not verified the accuracy of any claim or statement made by any independent writer and is reserved as their own and ICN.com is not accountable for their input. Any opinions, news, research, analysis, prices or other information contained on this website, by ICN.com, its employees, partners or contributors, is provided as general market commentary and does not constitute investment advice. ICN.com will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. The data contained on this website is not necessarily real-time or accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market prices, meaning prices are indicative and not appropriate for trading purposes. ICN.com does not bear any responsibility for any trading losses you might incur as a result of using this data.