Oil traded yesterday at a steady rate between $93 and $94 a barrel. The low volatility has strengthened the support level of $92 a barrel, which marks a very strong upside for oil as these levels are contained in a global financial slowdown.
Although results from the US show steady unemployment levels of 8.3%, the economy is still far from making a full recovery, in Europe there are very slow economic results, and in the BRIC countries, especially China, growth and GDP are at weak levels.

Oil closed yesterday’s trading session above $93 a barrel, strengthening its resistance level of $95 a barrel and upgrading its support level now that the price is finally comfortably above $90.
Although there were disappointing publications from Europe, given that production from Italy and Germany declined last month and German factory orders below expectation, oil still managed to rise. This is attributed to tension from the Middle East and the anticipated upcoming inventories. Inventories have been short for a few weeks now and today we should expect another decrease in count versus, ironically, a low demand and contraction fears across the globe.

Oil continued its upwards optimism in yesterday’s trading session, closing just above $92 a barrel and strengthening its support level of $90 a barrel. ECB action expectations have appreciated the Euro which is heading towards 1.24 versus the USD and as a result is increasing the price of oil. This comes along with high demand for oil caused by the rising European and American indices, as risk appetite has increased among investors.

Oil crossed the $90 a barrel mark last Friday and traded as high as $92, adding to the impression that for the near future, the round price of $90 a barrel is here to stay. The psychological price barrier was crossed after great results from the NFP, which indicated that the American market has expanded labor by 163,000 despite expectations of 100,000. In the midst of these results, a high burst from the European markets further increased demand expectation for oil after quite a recovery from Draghi’s last speech.

Oil traded yesterday as high as $89.5 a barrel with European indexes all in strong green areas before Graghi’s anticipated speech.
Investors did not anticipate such a vague speech and oil dropped to below $88 a barrel in less than an hour after a very disappointing review of Europe’s future financial action. Oil demand, and therefore its price, is heavily dependent on the Eurozone, the GDP of which is almost equivalent to that of the US at around 15 trillion. Thus continued uncertainty from the EU pushes oil down and appreciates the Dollar, causing all major currencies versus the dollar as well as the EU indices to drop sharply.