Crude oil is trading in a tight range around the $97.00 a barrel level as rising Middle East tensions and the weakening dollar offset concerns about moderating demand growth. All this ahead ahead of Bernanke’s testimony to Congress on Wednesday.
Further support to oil prices is given by the weakening dollar ahead of U.S. Federal Reserve chief Ben Bernanke`s testimony. Investors are paring back on expectations that the U.S. central bank will start reducing its bond-buying program anytime soon.
- The dollar index is trading around 83.95—oil tends to move inversely against the dolla,r as it reduces the appeal of the dollar dominated commodities
- Crude is trading around $97.02 a barrel, with the highest at $97.20 and the lowest at $96.73
- Brent is trading around $104.68 a barrel, as of this writing after falling 0.11% or $0.12
Yet weighing on oil prices is this week’s data that may show sluggish growth in major consuming economies. The PMI manufacturing due from China, the eurozone and the United States might not ease the worries of a sluggish global outlook.
“The conflict in Syria looks like it`s getting serious, and the dollar is heading lower, while continuing high inventories are putting downward pressure on prices," said Victor Shum from IHS Consulting, Singapore.
The U.S. crude inventory data due later on Tuesday may show a fall in inventories by 400,000 barrels may support oil prices. While the Energy Information Administration tomorrow may show stockpiles fell by 800,000 barrels last week.
Meanwhile, the central banks this week resume their role in the driving seat for markets. Besides the U.S. Federal Reserve, the Bank of Japan starts a two-day meeting on Tuesday. The Bank of England will release its meeting minutes on Wednesday.
- Natural gas is trading at $4.091 per cubic feet after rising 0.02%
- Gasoline is trading at $2.9016 a gallon after falling 0.14%
- Heating oil is trading at $2.952 a gallon after rising 0.04%