Market Commentary
WTI Oil Trades Near December Low as Stockpiles Gain a Fifth Week.
West Texas Intermediate oil traded near the lowest level since December after falling a second day as U.S. crude stockpiles increased for a fifth week, the longest streak of gains since May. Futures were little changed and heading for the biggest weekly drop since December. Crude inventories rose 4.1 million barrels last week, the biggest advance in three weeks, according to data from the Energy Information Administration, the Energy Department’s statistical arm. They were forecast to climb 2 million barrels, a Bloomberg News survey of analysts show. U.S. oil production increased to the highest since 1992, the government report showed. WTI for April delivery was at $93.02 a barrel, up 18 cents, in electronic trading on the New York Mercantile Exchange at 11:05 a.m. Sydney time. The contract slid to $92.84 yesterday, the lowest since Dec. 31. The volume of all futures traded was 70 percent below the 100-day average. Prices are down 3 percent this week, the most since the week ended Dec. 7. Brent for April settlement slipped $2.07 to $113.53 a barrel on the London-based ICE Futures Europe exchange yesterday. The European benchmark grade closed at a premium of $20.69 to WTI futures. The gap expanded to $23.18 on Feb. 8, the widest since Nov. 26. U.S. gasoline supplies decreased 2.9 million barrels last week, the Energy Department said. They were projected to fall 900,000 barrels, according to the median estimate of 11 analysts in the Bloomberg survey. Distillate inventories, a category that includes heating oil and diesel, slid 2.3 million barrels, compared with a forecast 1.8 million barrel decline.
Gold Declines to Six-Month Low on Signs of Economic Improvement.
Gold futures slid to a six-month low in the worst losing streak in more than a year as signs of economic improvement curbed demand for a protection of wealth. Silver fell to the lowest since August and platinum dropped. Gold declined for a fifth session as global equities reached the highest since June 2008. The Federal Reserve will publish minutes of its Jan. 29-30 policy meeting today and Labor Department data on producer prices today and on consumer costs tomorrow will show inflation is in check, economists surveyed by Bloomberg said. “Bullion’s safe-haven properties as well as its traditional use in inflation hedges are irrelevant at this point,” Andrey Kryuchenkov an analyst at VTB Capital in London, wrote in a report. “The market’s attention is set to turn to the Federal Open Market Committee’s January minutes.” Gold futures for April delivery fell as much as 1 percent to $1,588 an ounce, the lowest since Aug. 2, and were at $1,592.60 on the Comex in New York. A fifth straight drop would be the longest run since December 2011. U.S. markets were shut Feb. 18 for the Presidents’ Day holiday. Futures trading volume was 53 percent above the average in the past 100 days for this time of day. Gold for immediate delivery was down 0.7 percent at $1,593.30 in London.
Metals on defensive; Fed puts investors on edge.
Copper hit a 2013 bottom as demand for commodities weakened and worries grew that the U.S. central bank might scale back its program of adding liquidity to the financial markets. Spot gold recovered from the seven-month lows of the previous day on technical buying, although some traders said it could be vulnerable to further losses. The world's largest gold-backed exchange-traded fund said it experienced its largest one-day outflow in 18 months in Wednesday's selloff. The Thomson Reuters-Jefferies CRB index, a global commodities benchmark, fell 1.2 percent for its sharpest one-day slide since early November. Fourteen of the 19 markets tracked by the CRB fell, with wheat, crude oil and nickel prices down at least 2 percent each. Most commodities had also tumbled on Wednesday after rumors that a hedge fund was liquidating positions pushed prices below key support levels. FED'S NEW COURSE PLAYS DEEPER INTO MARKETS The U.S. Federal Reserve added to the selling pressure in gold when minutes of its January policy meeting - suggested that it might slow or stop its asset buying program before a pickup in U.S. employment becomes evident. The Fed's rethink of its bond-buying program played a broader role in market sentiment on Thursday as a ream of weak U.S. data fueled skepticism about the bullish bets that some investors had placed on the economy since the start of the year
