Crude Oil Futures Surge as Inventories Fall for First Time in 11 Weeks

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Commodities Trading

: 06 December 2013

With OPEC leaving its crude production target unchanged at a meeting in Vienna, US crude oil prices ended rather flat at $97.29.

On the one hand, the weaker dollar offered some good support but a drop in equities invited caution.

The Non-Farm Payrolls report due later today might have also kept a few energy investors on the sidelines.

Fresh speculation that ongoing good economic data will mean that the Federal Reserve starts scaling back its asset purchasing program hurt gold prices again yesterday.

The metal saw a loss of $18.6 to $1,224.7, which effectively erased most of the previous day's gains.

Commodities Trading

: 05 December 2013

A 5.6 million barrel slump in US crude oil inventories was the first decline in 11 weeks, surpassing estimates for a 0.5 million barrel drop.

That pushed US crude prices $0.53 higher to $97.28 per barrel, with the differential between WTI and Brent getting narrower.

Despite a flat day for stock markets and the US dollar, gold prices saw a sharp rally yesterday, advancing $20.3 to $1,243.2.

However, the yellow metal also posted a lower intraday low of $1,211.2 and is already on the back foot again at the time of writing.

Commodities Trading

: 04 December 2013

Estimates that US crude oil inventories have dropped last week for the first time since September, sparked a sharp rally in oil prices yesterday.

This came as economic data pointed to US manufacturing gathering momentum, which in turn encouraged energy investors to push US crude $2.90 higher to $96.76.

Compared with the previous day's steep sell off, yesterday's rebound of $3.5 to $1,222.8 could be described as anaemic bargain hunting in the gold market.

The move hardly changed anything in the wider bearish picture for the precious metal, which remains on course for its first annual loss in 13 years.

Commodities Trading

: 03 December 2013

Encouraged by positive Chinese growth figures released early in the day, commodity investors returned to the oil market in a more optimistic mood than last week.

Additionally, rising manufacturing figures on both sides of the Atlantic have given them extra ammo, with the rally accelerating in the second half of the trading session.

Overall, WTI crude prices recovered $1.26 to end at $111.36.

It was one of those days when good news on the global economic front delivered fresh blows to gold prices.

As such, the yellow metal reached a new recent low at $1,219.1, $31.8 down for the day, with a stronger dollar undoubtedly accentuating the sharp sell off.

Commodities Trading

: 02 December 2013

US crude oil rallied steadily for most of the day only to post a steep decline towards the close, giving back most of the gains.

The market settled $0.52 higher at $92.76 per barrel, but with oil inventories at record highs it would take a brave soul to try and catch the falling knife.

An early climb in US stocks, coupled with reports of rising precious metal demand from China, gave gold prices some breathing space on Friday.

The yellow metal rose $7.8 to $1,251.4, with the gold chart suggesting that there may be some consolidation just below the $1,240 mark.

Having said that, if the trend looks so bearish now, one might wonder what it will look like when tapering actually comes into effect.

By Jonathan Sudaria, 6 December 2013

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