| News | Oil loses its upside momentum on Citygroup and Nigeria |
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| Analysis | Markets rebounded this morning after China's weakest growth pace in 2-1/2 years fueled believes officials will accelerate the easing policies which could keep demand on oil steady, boosting confidence and soothing the worries from the EFSF downgrade by S&P last night, increasing demand higher yielding assets. This weakened the USD and helped commodities extend their gains, including crude oil which reached a high of $100.97. More upside pressures were imposed by the better-than-expected confidence data from Germany, and the expansion seen in New York's manufacturing sector in January. Spain and Greece witnessed a successful debt auction today which drove the borrowing costs down. Meanwhile Wells Fargo's reported better-than-expected earnings; however markets were disappointed by the earnings report posted by Citigroup today of 38 cents a share from 49 cents expected. This helped ease the market's bullish momentum enjoyed since this morning, and the euro went back to trade around 1.2760 from the highest at 1.2808, while the dollar index is trading at 81.20 from the lowest of 80.76, while gold is trading at $1656.95 from the highest at $1667.14. Markets will continue to follow the latest developments from Iran, since there are persistent fears from a supply disruption from the region, which could any moment outweigh the fears over Europe's debt crisis that imposes a "negative impact on oil demand". In Nigeria however trade unions called off strikes and protests that threatened to shutdown oil output, easing the upside pressures on oil today. Crude oil is trading as of this writing around the $100.20 level from the opening at $99.62, while Brent is almost unchanged trading around $111.25. |
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