Fundamental Oil Report (2012-02-06)

Crude oil opened today’s session at $97.69 and recorded a high of $97.74 and a low of $96.85, where it is currently fluctuating around $97.12 a barrel, where the dollar is pushing crude to the downside as it is rising today amid high uncertainty to reach so far a high of 79.38 after it opened the session at 79.08.

High uncertainty in Europe with some fears among markets have pushed the Euro downside raising pressure on the common currency, which pushed the dollar upside, the rising dollar is weighing crude significantly and increases the downside pressure on the commodity.

Lack of fundamentals today encourages volatility to dominate global markets, especially that Greece and its crisis remain stuck and Troika gave the country a deadline to act aggressively and put effective measures to cut the country’s deficit and reduce its debt in order to allow a second bailout by 130 billion Euros.

After mounting tensions among Iran and the west, especially on expectations that Israel would attack Iran if the country continued in its path to make a nuclear weapon the pressure; however the pressure had eased after President Obama said that he did not believe Israel was preparing to attack Iran to disrupt its nuclear program and that diplomacy remained the “preferred solution” to resolve the nuclear weapon issue.

Amid talking about global oil supplies, a militant group in Nigeria said that it attacked an oil pipeline owned by Italian firm Eni which the company said that the damage would mean the loss of about 4,000 barrels of oil equivalent a day.

On the other hand, The International Monetary Fund (IMF) cut its forecast for the Chinese economy this year that it would grow by 8.25% from 9.0% that expected in September, where the fund mentioned the threat of weakening exports amid an uncertain global environment and an expected deep recession in Euro zone.

No fundamentals are due from the world’s largest economy today, which called volatility to dominate financial markets especially that investors are waiting for results from Greece on austerity measure that would be discussed between the country’s unions.