By Russell Glaser – Spot crude oil prices tumbled yesterday over continued worries following the Greek bailout and increasing fears that the financial troubles will spread to other European nations. A stronger greenback also contributed to the falling spot crude oil prices.
At the close of yesterday’s trading, spot crude oil was trading at $82.34 from an opening day price of $85.80. The price decline of 4% largely erased the previous 3-day price rally.
Renewed concerns that the Greek debt crisis has yet to have been secured helped to send the EUR/USD to a 12-month high. This in turn hurt the price of spot crude oil as crude oil is denominated in dollars. As the dollar appreciates in value, crude oil becomes more expensive.
Traders are concerned that a failure of the EU/IMF bailout package to contain the Greek debt crisis will slow European growth and future consumption of crude oil. Rising fears that Spain may also seek aid also weighs on Europe.
This remainder of the trading week should be influenced by key data releases. On Wednesday, the weekly crude oil inventories report will be released by the U.S. Energy Information Administration. Expectations are for an increase of 0.6M barrels of crude oil to be added to U.S. supplies. This would be the third consecutive week of increasing U.S. crude oil supplies.
On Friday the U.S. Non-Farm Employment change will be released. A positive outcome for this highly influential economic data piece could spur crude oil buying. The next short term resistance level for spot crude oil rests at $83.00.
Forex Market Analysis provided by Forex Yard.
© 2006 by FxYard Ltd
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