Oil Up With Rising Risk Appetite on Greek Bailout Hopes
Posted at Wednesday, February 10th, 2010 at 7:43 am
Futures up for the second straight day from under $72 to around $73.80 with general risk asset rise on Greek bailout hopes.
Crude rose on Monday, snapping three sessions of losses, as a weaker U.S. dollar, a cold snap and geopolitical tensions provided support.
But fears over the euro zone’s sovereign debt woes continued to cast a pall over commodity and equity markets, with Wall Street closing Monday below the 10,000-level for the first time since November, and Japan’s Nikkei average hitting its lowest in two months on Tuesday.
Oil prices have lost nearly 10 percent this year, dragged down by data showing bulging fuel stockpiles in the United States despite cold weather, concerns about slower Asian demand if China further tightens its monetary policy, and more recently, jitters over Europe’s financial stability.
“There is some unwinding of price increases overnight. The continual flight to quality is underpinning the strength of the U.S. dollar, which is in turn weighing on oil prices and commodities in general,” said Ben Westmore, commodities analyst with the National Australia Bank in Melbourne.
“Demand prospects look pretty shaky in the medium term, and all that uncertainty is causing a moderation in equity markets, which is being reflected across commodity markets as well.”
This analysis is republished with permission from Cliff Wachtel.Cliff Wachtel is the Chief analyst for AvaFX
You can find his blog at fxmarketanalysis.wordpress.com
