By FX Empire.com
Crude oil prices extended the rally on Monday amid reports EU leaders are discussing strong measures to ease the European debt crisis, which pushed the U.S. dollar sharply lower against major currencies, providing crude oil prices with some bullish momentum.
Moreover, fears from decreasing supplies of oil provided crude oil prices with strong momentum earlier on Monday, where investors were concerned due to rising tensions with Iran amid reports that Europe is planning a ban on Iranian oil, which raised fears over the outlook for supply.
Fears from Europe eased over the weekend after a report suggested the International Monetary Fund was working on a plan to help Italy, although the IMF denied any negotiations with Italy. Nonetheless, traders were optimistic that EU leaders are working on drastic measures to ease mounting concerns in markets over the outlook of the European debt crisis. Nevertheless, expectations of a mild recession in Europe maintained the negative pressure on crude oil prices, as crude oil erased earlier gains and dropped back below $100 a barrel.
Traders will continue to monitor the developments from Europe regarding the debt crisis, where rising yields in Europe suggest investors are concerned amid the uncertainty that is surrounding the outlook of the EU debt crisis. The EU finance ministers will meet on Tuesday in Brussels, where expectations signal that they will announce details of their plan to increase the firepower of the European Financial Stability Facility EFSF fund.
Our overall outlook for crude oil prices is still bearish, where expectations of slowing global growth, in addition to the uncertainty over the outlook the European debt crisis and its impact on growth in Europe are likely to keep crude oil prices under pressure over the coming period. Nonetheless, traders will continue to watch the developments in Iran, since it could still provide crude oil prices with bullish momentum on fears of disruptions in supplies.
Tuesday November 29:
TheUnited Stateswill join the session at 14:00 GMT with the S&P/CS 20 report for September, where the monthly S&P/CS 20 City index is projected to remain steady compared with the previous drop of 0.05%, in the time the annual S&P/CS composite-20 could have dropped 3.00% from the previous drop of 3.80%.
At 15:00 GMT the United States will announce the consumer confidence for November, with expectations it could have improved to 44.4 from 39.8.
Originally posted here
