Oil Price Slide Resumes

Even though the geopolitical outlook remains tense, energy prices are ignoring the uncertainty after both Brent and WTI crude oil prices took out major short-term technical levels that had seen prices elevated for several weeks. WTI slumped overnight as concerns about growing supplies and the reopening of Texas shipping channels saw prices fall just over a point at the open before recovering half the move. This marks the lowest prices since March 2009 when the US was in the depths of the last financial crisis. One factor that might be supportive of prices to the upside in the near-term is the growing possibility of an unexpected event in Saudi Arabia as oil installations are threatened. The United States has issued warnings to citizens traveling in Saudi Arabia and suspended consular operations at the embassy due to security concerns.

In incessant friction between Germany and Greece is seeing both nations increasingly at odds over Greece’s future in the Eurozone. The latest comments from Greece suggest that the country would like to default and stay within the Euro Area while the Germans are proposing a complete exit from the Euro Area. The German Government has reiterated its opposition on several occasions to bailing out Greece further with taxpayer dollars as they seek to banish what they see as Euro noncompliance. Each sides’ demands have become increasingly difficult to satisfy, leading to a confidence drop in the Euro. Coupled with recent revelations that the ECB’s quantitative easing program is already seriously distorting bond markets means that the grand plan to reverse Europe’s fortunes might be in trouble. EURUSD is struggling to stay above 1.0500 after hitting multi-year lows on Friday.