TRADERS´ Blogs

Oil is on track to post its biggest quarterly fall since the financial crisis in 2008 as the euro zone crisis and weak growth in the United States roiled global markets and threatened to derail fuel demand while ample supply from OPEC capped price gains.

Top crude exporter Saudi Arabia wants an oil price of around $100 a barrel. Europe moved a step towards a pro-growth policy after Germany agreed with leaders of France, Italy and Spain on a 130 billion euros package to revive growth, but resisted pressure for common euro zone bonds or a more flexible use of Europe's rescue funds. Investors are closely watching a crucial European Union leaders summit later this week, bracing for disappointment but keen to put money to work on any signs of a unified and comprehensive plan to tackle the region's 30-month-long debt crisis. The success of the summit can probably best be measured by whether it achieves a meaningful and lasting decline in Spain's bond yields. Investors are also watching if Saudi Arabia will reduce output to stem the recent price fall after the Organization of the Petroleum Exporting Countries agreed in mid-June to maintain the 30 million barrels per day production ceiling. The ramp-up in OPEC output has cushioned the impact of sanctions from the United States and the European Union on Iranian crude exports.