| News | Crude oil relaxes after rally |
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| Analysis | Crude oil futures for December retrenched today after a strong rally which is driving the commodity to end with a strong weekly gain. Crude oil futures are currently hovering around $93.26 a barrel down 0.74% after recording the high at the opening levels of $93.93 and declined to the low of $92.01 a barrel. Heavy correctional moves for crude were seen today after the volatile week, especially as the market mainly was consolidating today after the relief rally which was triggered by the upbeat sentiment over Europe and the U.S. economy. Thursday saw good gains for crude as the market reacted positively with the announced broad plan to contain the crisis and also the 2.5% expansion reported from the U.S. economy in the third quarter with the expansion in personal consumption. The good news sent the futures to end higher by 4.2% and today’s correction seems rather logical with the end of the week. We can see the mixed sentiment still evident especially as crude is heading to end the week with nearly 7.0% gain. We can see investors feeling less pessimistic for now on the outlook for the global economy with the actions to contain the debt crisis while macroeconomic data also help as they only reflect the slowdown and not a recession state of the economy. U.S. data today also helped cap the losses for crude were despite the slight rise in income, spending rose 0.6% in September and confidence was revised higher and that all support the positive outlook. Still, analysts and traders see the rise excessive in a short period and especially amid the fragile state of growth and prevailing uncertainty which might reverse the gains soon for crude. Investors are counting on next week with the FOMC decision, the G20 meeting and the nonfarm payrolls and shall the good signals continue to flow and investors remain optimistic on Europe then we shall see crude extend the rally for sure. |
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