There was a contract change for crude oil this week as volume on September delivery increased and the price rose for the fourth consecutive week.
However, it once again failed to sustain a rally above the $100 level, which is proving strong resistance. Thursday saw the black gold rise to its highest level for around 6 – weeks, briefly reaching $100.16 before quickly falling back.
The driving force behind oil‘s rise and fall has ultimately been Greece‘s debt crisis and the European debt woes as a whole. European leaders declined to raise the region‘s E440bln bailout fund which raised concerns on whether it‘s big enough to contain any contagion that may spread to Spain and Italy. “The movement in the euro is influencing the crude oil price as people are watching the European situation and the Greek debt crisis,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts.
2011 has been an eventful year for oil so far. There have been natural disasters, revolutions, terrorist attacks and political manoeuvring which has largely kept oil bouncing around $100. But oil‘s outlook for the rest of the year has remained strong, as the IEA said in its latest Oil Market Report: “The bull run evident since autumn 2010 therefore looks in large part to be justified by supply and demand fundamentals.”
