Fundamental Oil | Learn Forex | GoLearnForex.com

Crude oil is attempting to start a mild correction to recover from yesterday’s losses after the industrial production in the world’s biggest economy dropped sharply, although, oil is currently trying to benefit from the weakening dollar which gives oil positive momentum.

Oil fluctuates at the end of the week but with a mild upside momentum, as it declined heavily in the past two days amid worries from Europe that leaders are unable to contain the crisis by taking serious measures that would be enough to solve the crisis.

Oil is moving higher this morning despite negative factors that would affect it today, as Fitch rating agency has downgraded the rating of seven global banks in Europe and United States, citing "increased challenges" in the financial markets.

Crude oil opened today’s session at $93.34 to reach a low of $93.30 and a high of $94.36, where it is currently trading positively around $94.22.

Volatility and fluctuations will be evident today as we said due to the lack of fundamentals from major economies except the CPI index from the world largest economy which is expected to maintain its levels.

Yesterday, the US industrial production unexpectedly dropped by 0.2 percent in November from 3.6 percent for the first time in seven months, mainly due to the current slowing global economy and crisis in Europe that limits American exports, which affected crude significantly and added negative pressures on the commodity that the world’s biggest consumer is struggling.

On the other hand, crude will be so volatile today as we signaled, as investors will close their positions amid high uncertainty which darken the future picture for market movements, therefore, investors will likely try to avoid any unexpected loss.

Confidence levels in Europe remain low amid signs of dark future for the continent, as measures took by leaders, did not convince markets that there would be enough to solve the crisis, where the ECB is avoiding to intervene in the bond market to stem rising borrowing costs, as it’s not its mandate.

The Italian Lower House of Deputies will vote on the austerity package worth 30 billion euros today, while the Upper House of Senators will hold the vote later during next week, where it is expected to pass easily due to the country’s need for this package to reduce its budget deficit and restore lost confidence in its ability to recover from this crisis.