FXS: Crude settles above $83.00 on QE speculation and mixed stockpile report
FXstreet.com (Barcelona) - Crude oil extended to the upside yesterday, breaking past $83.00 resistance as weaker than expected ADP employment data fuels further monetary easing speculation. The crude contract for November delivery remains at 5-month highs, trading slightly higher since open at $83.75 a barrel.
While a disappointing ADP employment report triggered a broad sell off in equities, the data point only expands expectations of more aggressive stimulus measures by the Fed following the BoJ’s decision to cut rates earlier this week. What’s more, the EIA reported late yesterday a large drop in US gasoline inventories by as much as 2.65 million barrels, despite an unexpected rise in crude inventories by 3.09 million barrels.
A weak US dollar also continues to support crude prices to the upside, making imports of dollar denominated commodities cheaper on the international market. The EUR/USD is pushing 8-month highs at 1.4000 and is showing no signs of reversal.
