Wednesday, 23 Feb 2011

Crude Oil Approaches $100 a Barrel Amid Libya Unrest

The price of crude oil continued to climb throughout the day, reaching as high as $99.70 a barrel before staging a slight downward correction. Analysts attribute oil's bullishness to the turmoil that has enveloped Libya, a country that is considered one of the major oil producers. Meanwhile, the political unrest across the Middle East has sent investors to safe haven assets, in particular the Swiss franc which continues to edge toward record highs. Currently the USD/CHF is trading at 0.9333, down close to 55 pips in the last 24 hours.

Tomorrow, traders will want to pay attention to several potentially significant news events out of the US which may help the dollar recoup some of its recent losses. First, the weekly Unemployment Claims figure is expected to be slightly lower than last week's. If true, investor confidence in the US economic recovery may receive a boost. In addition, the US New Home Sales report is forecasted to show a slight improvement in home sales over last month. The figures may lead to short term dollar gains in evening trading tomorrow.