|News||Oil starts the week with a downside correction|
Crude oil started the week with a downside bias after the strong gains last week backed by fears over global oil supplies and signs of recovery across global economies. Today the pressure was seen from downbeat comments from the G20 Finance ministers that asked Europe to show more commitment and raise its bailout funds before they step in and expand the recourses of the IMF.
Crude oil surged sharply last week as it was only a little shy off $110.00 a barrel, which is a very high for the commodity and could widely affect the pace of the recovery globally, and we can blame Iran and its nuclear program for those high prices for crude.
We can see mild downside correction movements for crude which is normal after the rally. The trigger was mainly negative sentiment after the G-20 finance ministers’ meeting showed little willingness to help Europe through the IMF for now, but they called for more efforts from Europe to halt its crisis by raising the ceiling of their funds before they consider taking steps.
The G-20 have also discussed the high price of oil and its effects on global growth, especially with sanctions on Iran which threatens oil supplies, where other exporter economies lead by Saudi Arabia said that they are ready for covering this gap and increase oil production.
However, volatility will dominate financial markets this week ahead of the EU summit which is eagerly awaited by investors to know the measures that leaders would take to halt the crisis and push up the confidence in the region and support weak growth.
The jitters are seen across financial markets and pushing the dollar upwards which is weighing on crude and pushing it to the downside. Today the volatility is likely to continue with eyes on Greece and the German parliament that votes on the new bailout for Greece today and any weak position for Merkel will surely fuel the pessimism.