Crude oil hovers around opening levels but biased bearishly after yesterday’s gains on Saudi’s oil minister comments as he refrained from previous comments by saying that he will not ask for raising OPEC’s production ceiling.
Crude oil opened today’s session at $83.41 and recorded a high of $83.48 and a low of $82.61, where it is currently hovering around $83.30 a barrel.
As we said before, volatility will dominate crude’s trading ahead of key events this and next week. OPEC’s quarterly meeting tomorrow will finalize the debate on whether to change the agency’s oil production ceiling in order to pressure oil prices to the downside.
The focus is now on Europe’s developments as investors await the Greek elections that may kick the country out of the euro area if the anti-bailout parties won and insisted on rejecting the bailout terms, which will ensure the “Grexit.”
The way is not clear now not only for crude oil but for the entire market as major events are likely to change the current picture for the market and will move the market strongly depending on how positive or negative these developments are.
Yesterday, crude oil was strongly biased bullishly after Saudi’s oil minister who signaled that he will not ask for higher oil production in OPEC’s meeting tomorrow and he is happy with current conditions, which pushed the commodity sharply upwards.
On the other hand, the American Petroleum Institute (API) said for the week ended on June 8, U.S. crude stockpiles rose by 1.6 million barrels due to higher imports, against the forecast for a 1.4 million-barrel decline.
Today, oil traders are waiting for the EIA report that may show a drop in U.S. oil inventories by 0.1 million barrels less than the previous reading 1.5 million barrels decline in the inventories.
In general, crude oil would be volatile today ahead of key data that will be released from the world’s largest oil consumer. On the top of the list we will see the retail sales index which is expected to have declined during May adding more signs that the recovery pace remains fragile in the U.S. economy affected by the European debt crisis.
