20/02/2012
crude oil analysis
Crude oil jumped today above the $105.00 level, the highest since May last year, while Brent is trading at an 8-month high above the $120.00, after OPEC's second largest producer, Iran, cut its oil exports to Britain and France during the weekend, ahead of EU’s embargo that starts in July 1.
Investors' appetite for risk increased today, driving the US dollar lower against the euro, opening the way for commodities to widen their gains, as optimism was sustained by hopes over the Greek deal, as the euro zone finance ministers who will meet later in Brussels might approve the 2nd bailout package.
Meanwhile geopolitical issues in Syria, Sudan and Nigeria are also sustaining oil prices to the upside on worried from a supply disruption. J.P. Morgan raised today its 2012 price forecasts for Brent by $6 to $118 a barrel, and 2013 forecasts to $125 a barrel from $121, mainly due to supply risks and economic recovery.
Demand on oil also widened after China cut its reserve requirements trying to boost the lending capacity in an attempt to sustain economic growth since Europe’s crisis weighed on exports, supporting the demand outlook for commodities from China.
Amid thin trading, as the US markets are closed for Presidents Day holiday, crude oil rose today to the highest of $105.78 from the lowest at $104.69, and as of this writing is trading around the $105.40. Meanwhile Brent rose today to the highest of $121.15 and as of this writing is trading around the $120.30.