Source: ForexYard
Crude oil saw an upward spike in overnight trading. This was largely due to the decreasing value of the US dollar as the Fed debates new quantitative easing measures to boost the ailing US economy. Crude is currently trading around the 82.80 level, up over 100 pips from last night. With the first OPEC meeting in seven months set to take place on Thursday, as well as the latest US crude oil inventory figure about to be released, now may be a good time to examine oil a little more closely to determine how long it will be able to maintain its recent gains.
Ahead of Thursday’s meeting, OPEC ministers seemed fairly comfortable with the current level of crude oil output. With analysts forecasting no major announcements regarding output or pricing, oil is likely to stabilize today between 83.50 and 84.00.
Tomorrow’s crude oil inventory promises to generate substantially more volatility. Analysts are predicting a decrease in US stockpiles from last week’s figure of 3.1M. Should tomorrow’s result come in at the forecasted number of 1.5M, oil may see a significant price jump to close out the week. In addition, traders will want to pay careful attention to any fluctuations in the USD. Should the dollar continue to fall, there is a good chance oil prices may rise in tandem.
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