Commodity Daily News

Unexpected Rise in Crude Oil prices

Crude Oil begins to gain after falling below $82 a barrel at the end of last week. It rose after policymakers around the world took new and drastic steps to rescue banks and prevent the global economy from sinking into recession.

The governments of the U.S., Europe and Asia are offering their support for the banking system to stem the financial crisis threatening the global economy. After Crude declined for the past few months on concern that a global recession will cut demand for fuel, the market waits to see some evidence that these government interventions are having a positive influence, or are at least dampening the global panic. The recovery process is likely to be very long winded and will likely take about as long as the crisis. If government measures to shore up markets succeed, Oil prices will be poised for a recovery.


Moreover, since the EUR jumped the most in three weeks against the dollar today on the region's bank rescue plan it will also likely to speed up the crude prices . Because a weaker dollar typically supports Oil prices, it makes commodities cheaper for buyers in other currencies.

The announcements from over the weekend are likely to have some positive effects on the markets. And even though it's still very early at this stage to say if they would put an end to the financial crisis, the market's positive expectations are more than likely to raise crude prices.