Egyptian Tensions Boost US Crude Oil Spread Betting Market

Spread Trading 31 Jan 11

Today's update see » Financial Markets.

Spread Trading 31 Jan 2011

Geopolitical tensions in the Middle East are never a good thing for financial markets and last Friday we saw just how they can affect oil prices in particular.

The US crude oil spread betting market jumped from $85 to $89, at one point rallying over a Dollar in 10 minutes. This understandably brought the sellers out in equity markets so this morning we’re seeing further weakness for the FTSE, albeit slightly better than where we were calling the market to open overnight.

The unrest has been going on for days and will continue well into this week unless there is a change at the top of Egypt. For now the military haven’t got involved which has led to a swathe of lawlessness, but the fear is that if they do the death toll could be made even worse.

There’s no question that the demands of the people for regime change need to be met, but the fear that the result would be a less friendly “ally” of Israel could put further upward pressure on oil prices.

The higher oil prices are not having the usual effect on the FTSE which you would expect to actually gain, with the oil majors seeing buyers. In contrast, this time the rises are for different reasons so the sell off is a broad one with only the utility sector making a little bit of ground.

We had been calling the FTSE as low as 5800 first thing on Sunday evening, but we’re some 30 points better than that now, having been higher in earlier trade.

With the bullish trend still evident the temptation is to buy at these levels particularly since the declines have been as much as 4% so far. However, many financial spread betting investors will be happy to sit on the sidelines for as long as the Egypt issue plays out for fear of trying to catch a falling knife.

The FTSE has been knocked from its highs more than many other indices, such as the Dax and Dow, so there’s a fear that if these indices see similar weakness to the FTSE the London market’s declines may have further to go.

The 5800 level is crucial as it’s the upward trend line for the market ever since this rally commenced in July, so a break below here could spell further weakness to around 5520 or even 5400 over the medium term.

Economic data comes in the form of US personal income and spending at lunchtime, both of which are expected to show a healthy rise. Then the Chicago PMI is released which is due to remain well above the 50 mark suggesting expansion for manufacturers.

Currency markets are relatively quiet this morning with a hint of Dollar negativity after feeling the bout of risk aversion on Friday. Cable is drifting sideways just above $1.5800 and EUR/USD is just above $1.3600.

For EUR/USD $1.3535 and $1.3465 are important levels to the downside and, in order to persuade bulls its rally isn’t over, it needs to get back above $1.3675. For Cable $1.5825 and $1.5775 are important.

The gold spread trading market unsurprisingly bounced aggressively off lows and almost finished the week back above $1350. Still, the risk aversion this morning is also putting pressure on the price of the precious metal which is 6 Dollars softer at $1333.

Gold’s retracement has just come to a brief half but traders will be keeping an eye on $1318 and $1307 to the downside, meanwhile $1347 to the upside is resistance.

As mentioned crude was the exciting market to watch late on Friday as it spiked dramatically. Brent was just a whisker short of recording three figures, hitting a high of $99.90 overnight, and is softer this morning at $98.90. All eyes will be on events in the Middle East and this will be the determining factor for oil prices in the coming days.

Under no circumstances are the comments and the information provided herein to be considered an offer or solicitation to invest and nothing herein should be construed as investment advice.

Neither CleanFinancial.com nor Financial Spreads or any contributing author accept any responsibility for any use that may be made of the above or for the correctness or accuracy of the information provided.

Financial Spreads » "With FinancialSpreads.com you get all the advantages of
Spread Betting as well as commission free CFD Trading on 2,500+ markets, 24 hour trading, professional level charts and..." read Financial Spreads review.

Risk Warning: Spread betting and CFD trading carry a high level of risk to your capital and you may lose more than your initial investment. Spread betting and CFD trading may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary

Article provided / approved by Financial Spreads which is a trading name of London Capital Group Ltd which is authorised and regulated by the Financial Services Authority (FSA), FSA Register number 182110

'Spread Trading 31 Jan 11' edited by SD, updated 31-Jan-11

Related Articles:

Gold Spread Trading Market Falls on Cyprus Bailout Deal and Stronger US Data, updated 27-Mar-13
The gold spread trading market is seeing its worst run in three weeks due to a combination of upbeat data from the US and the Cypriot bailout deal. Many are now wondering when the safe haven sparkle...read article: Gold Spread Trading Market Falls on Cyprus Bailout Deal and Stronger US Data.

Contagion Fears Cause the Dow Jones Index to Pull Back, updated 26-Mar-13
The US session took a turn for the worse just after the Dow hit a new all time high of 14,563, with the index losing 64 points overall to close at 14,447. The question of whether similar turmoil to the Cyprus debacle...read article: Contagion Fears Cause the Dow Jones Index to Pull Back.

Wall Street Spread Betting Index to Open Higher amid Growing Investor Optimism, updated 25-Mar-13
At the time of writing, we are calling the Wall Street index to open 50 points higher this afternoon at 14,560. US investors got everything they needed last week; reassurance from the Fed over their...read article: Wall Street Spread Betting Index to Open Higher amid Growing Investor Optimism.

Safe Haven Demand Sees Gold Futures Rally, updated 22-Mar-13
The banking crisis in Cyprus is far from being resolved. In the commodity markets, it came as no surprise to see gold futures edging higher yesterday. The precious metal rose $8.2 to $1614.3 on safe...read article: Safe Haven Demand Sees Gold Futures Rally.

Commodities Spread Betting: Gold Slumps as Profit Taking Ensues, updated 21-Mar-13
In commodities spread betting, after rallying for four days, profit taking had put gold prices on the back foot even before the Fed's statement. Chairman Ben Bernanke's speech then triggered renewed...read article: Commodities Spread Betting: Gold Slumps as Profit Taking Ensues.

EUR/USD FX Trading Pair Finds Support as Equities Bounce, updated 20-Mar-13
In FX trading news, the surprising bounce in equities is leading to a bit of support for the euro as EUR/USD trades at $1.2900 at the time of writing. Gold closed $7.3 higher at $1,612.1 yesterday, and is...read article: EUR/USD FX Trading Pair Finds Support as Equities Bounce.

Gold Spread Betting Market Finds Support amid Cyprus Nervousness, updated 19-Mar-13
The gold spread betting market closed at $1,604.8 yesterday and is managing to keep its head above the $1,600 mark as investors remain nervous about the situation in Cyprus. Safe haven interest in...read article: Gold Spread Betting Market Finds Support amid Cyprus Nervousness.

Bank Levy Announcement Causes the EUR/USD Spread Betting Pair to Fall, updated 18-Mar-13
Despite a 71 point rebound for the EUR/USD market on Friday, reaching $1.3074, a surprise weekend announcement from Cyprus saw the pair tumble below $1.2900 this morning. It appears that Cyprus has...read article: Bank Levy Announcement Causes the EUR/USD Spread Betting Pair to Fall.

Dow Jones Spread Betting Market Extends Gains as Jobless Claims Decline, updated 15-Mar-13
Yesterday, the Dow impressed again with its tenth straight gain in a row. Amid a surprise drop in the US jobless claims figures, investors took advantage of the bullish momentum to push the Dow Jones...read article: Dow Jones Spread Betting Market Extends Gains as Jobless Claims Decline.

Forex Spread Trading: US Dollar Rises with Upbeat Economic Data, updated 14-Mar-13
In forex spread trading, better-than-expected US economic data was undoubtedly the reason behind yesterday's boosted demand for the dollar. With the US economic outlook in arguably the best...read article: Forex Spread Trading: US Dollar Rises with Upbeat Economic Data.

First Page << 1 2 3 4 5 6 7 8 9 10 11 12 >> Last Page

Daily Spread Trading Index

Index of spread trading articles - the daily Spread Trading update from Financial Spreads, for more articles see the Spread Trading News Index.

Q) Average Trading Results?

A) Get free trading tips, offers, price updates, important news and more! All Free - Click here!

Risk Warning: Spread betting and CFD trading carry a high level of risk to your capital and you may lose more than your initial investment. Spread betting and CFD trading may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.

The contents on CleanFinancial.com are for information purposes only and are not intended as a recommendation to trade. Nothing on this website should be construed as investment advice.

Neither CleanFinancial.com nor any contributing company/author accept any responsibility for any use that may be made of the above or for the correctness or accuracy of the information provided.

* Tax law is subject to change or may differ if you pay tax in a jurisdiction other than the UK.

1) Daily Trading Tips

2) Financial Tips

3) Financial Tipping