Crude Oil Forecast Dec. 22, 2011, Fundamental Analysis

Crude oil prices surged on Wednesdaythough the dollar gained after the European Central Bank offered more than expected loans for the euro-area banks, mirroring the worsening impact of the debt crisis on European lenders, yet crude oil rallied on the EIA report which showed a decline in inventories last week, boosting investors’ appetite the black gold.

While the year nears to end, lights are about to fade upon the financial markets, where will accordingly see low volumes and limited trading as well before Christmas holiday. The sentiment will start to shape as investors stay cautious ahead of the New Year’s but traders will be mostly concerned about the latest development from the 17-bloc euro area.

The outlook for crude oil prices remains mainly to the downside, as persistent fears from the EU debt crisis and signs global growth is slowing are likely to keep crude oil prices under pressure, as traders continue to monitor the developments from the 17-bloc euro nation and the European leaders’ latest acts to contain the debt crisis, so we expect volatility to persist over the sessions this week.