Commodity Daily News

Crude Oil Erases Gains and Closes near $84.60 A Barrel

Crude oil began last week's trading session with a rising trend, and reached as high as $88.60 a barrel. However by Thursday the trend has sharply reversed and crude fell about 400 pips, to reach as low as $84.60 a barrel.

Crude oil sharply fell close to the weekend on concerns that China may go for further monetary policy tightening after its inflation hit a two year high. Economists expect that China will hike rates, which is likely to dent demand for crude oil from the world's second largest energy consumer. In addition, recent reports regarding the European sovereign-debt crisis have raised concerns that demand for energy in Europe will decline, adding to the bearish pressure on crude oil.

As for the following week, traders are advised to follow the leading economic updates from the U.S. and the euro-zone, as these are likely to have a large impact on crude oil prices. In addition, traders are advised to follow the U.S. Crude Oil Inventories report, which is scheduled for Wednesday, as this release usually has an instant impact on the market.