Oil for March delivery posted its first weekly gain in three, falling just shy of the three - digit mark. Speculation of supply being interrupted following some refinery outages and plant closures lifted prices higher in the week.
However, one of the key drivers for the price increase was the outcome of the Greek talks. The current increase in risk appetite has market participants believe that Greece will negotiate a deal with its investors and avoid the dreaded default.
The Federal Reserve’s pledge to hold the rates steady till the end of 2014 sank the dollar to a seven - week low, thereby buoying investor sentiment and sending prices higher. Crude also advanced on concerns that Iran may disrupt supplies.
A smaller than expected increase in crude inventories pushed prices higher as well. For the week, the forward contract remained range bound, trading between 98.34 and 101.39.
A lot of the gains were reversed on Friday, after the largest consumer of the commodity saw its economy expand less than expected, casting doubt on future consumption.
Oil prices have been trending sideways for nearly five weeks, and given the current weakness in demand, analysts do not see a trend forming unless Greece provides a solution that boosts risk appetite.
Courtesy: CPM Group for DGCX
