Crude Oil Slumps Amid Concern Over How Shutdown Will Affect Demand

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Commodities Trading

: 04 October 2013

We saw some profit taking in the energy complex after the previous day's sharp rally, with the price of Nymex crude oil slipping $0.94 lower to $102.86 per barrel.

Investors remained concerned that the US government shutdown will harm fuel demand as talks between President Barack Obama and Congressional leaders failed to come up with a solution.

On the one hand, slumping demand from China, the world's second largest buyer of gold, continues to put downside pressure on the precious metal.

However, on the other hand, gold is also seen as a hedge against uncertainty which could stay somewhat supported given the stalemate in the US political arena.

As a result, gold spread trading prices ended yesterday's session largely unchanged around $1,316.8.

Commodities Trading

: 03 October 2013

WTI crude oil climbed today off the back of news that a planned gulf pipeline will be completed and ready to start up by the end of the year.

US oil futures ended the day $2.06 higher; the largest gain in two weeks.

Prices were up 2% on the close, also helped by the weakening dollar and uncertainty in the market.

The rising prices came despite US data showing a rise in crude stockpiles.

Falling stock prices and increasing uncertainty about the future of the US economy helped gold prices to climb as it received more attention from investors, closing higher at $1314.76.

The climb in gold prices was also helped by weak US economic data showing that fewer jobs than expected were created in the private sector, making gold an attractive investment due to its safe haven appeal.

Commodities Trading

: 02 October 2013

Sorry, there is no commodities market commentary for today.

Commodities Trading

: 01 October 2013

Front month US crude oil futures closed out their first monthly fall since May.

Easing tensions between Iran and America, along with worries over a possible US government shutdown, helped drive oil prices lower during Monday's trading session.

Meanwhile, weak manufacturing data from China has also been a factor in the fall in prices, highlighting concerns over China's economic strength.

US crude settled $0.54 cents lower at $102.33 per barrel after recovering from a session low of $101.05.

Gold prices stayed firm ahead of the looming shutdown, with Congress' failure to pass a spending bill helping to limit the decline in gold prices as investors looked for a substitute to the weakening dollar.

Spot gold closed at $1,331.77 after its best quarter of 2013, although this was more down to the metal's weak performance in the previous two quarters.

Commodities Trading

: 30 September 2013

The energy sector was rather concerned on Friday that the US budget impasse could hit the country's economic growth, which in turn would hurt the demand for oil.

Meanwhile, the Syrian risk premium is still being priced out as the plan to eliminate the country's chemical weapons looks to be going ahead.

As a result, the price of US crude oil continued to drop, losing $0.26 to $102.60 per barrel.

On Friday, a Federal Reserve official expressed his view that US economic growth needs to show more consistency before any reduction is applied to the current stimulus package.

That offered an incentive to gold investors to jump in, sending the precious metal prices $12.5 higher to $1,336.3.

In addition, the threat of a US government shutdown, which could also bring a default, seems to be increasing the support for gold prices.

By Jonathan Sudaria, 4 October 2013

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