By FX Empire.com
Crude oil prices erased earlier gains and dropped on Monday, where traders were feeling optimistic earlier after the G20 vowed to provide support to Europe to ease the region’s debt crisis and prevent it from spread, while also calling for the IMF to have a bigger role in easing the crisis. Nonetheless, pessimism dominated again after a German official downplayed the chances of announcing a final resolution to the EU debt crisis at next week’s EU summit, which put crude oil prices under strong negative pressure.
The outlook for crude oil though has become highly uncertain, since the sentiment in markets has become the major market mover for crude oil prices, but overall, we still expect crude oil prices to remain under pressure, since signs of weak global growth continue to emerge. Moreover, the uncertainty that continues to surround the outlook of the European debt crisis could also put negative pressure on crude oil prices over the coming period. However, we should note that Chinese growth data could play a major role for crude oil prices on Tuesday, as traders will be closely watching the release.
Tuesday October 18:
At 12:30 GMT the U.S. Producer Price Index for September is due and expected with 0.2% rise on the month after it remained unchanged in August and on the year to ease to 6.4% from 6.5%. Core PPI index is expected also with 0.1% on the month in line with August and on the year to ease to 2.4% from 2.5%.
At 13:00 GMT the August TIC flows is due after in July the net long-term TIC flows recorded $9.5 billion rise and the total net TIC flows recorded net selling of $51.8 billion.
