News that Libya Will Reopen Oil Export Terminals Sees WTI Prices Tumble

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Commodities Trading

: 04 July 2014

Nymex crude oil prices fell for the fourth straight session yesterday, losing $0.19 to $104.09 per barrel following easing fears over oil supply disruptions in Iraq and Syria.

The Islamist insurgency in the Middle East was the main reason for the recent rally in crude, especially the move seen on 12 June, but as output was not affected too much investors are reducing that risk premium.

Signs that the US economy is staying the course and getting healthier brought trouble for precious metals amid record highs for stock markets.

Gold prices lost $7.9 to $1,320.3 on heightened expectations that good news on the economic front will push the Fed to raise rates sooner.



Commodities Trading

: 03 July 2014

In civil war torn Libya, rebels announced plans to reopen two crude oil export terminals, thus increasing supplies in a market already awash with crude.

The effect was a sharp drop in WTI crude prices, with the market losing $0.97 to $104.23 per barrel.

This was compounded by a strengthening dollar and discarded a larger than expected draw the weekly US inventories report.

As Fed Chair Janet Yellen reaffirmed her stance to keep interest rates at record low levels, investors were encouraged to look for alternative assets.

Gold has often been called upon to fulfil that role in the current low interest environment, with prices gaining $1 to $1,327.7 yesterday.



Commodities Trading

: 24 June 2014

After opening steeply higher at $107.43, US crude posted a steady drop throughout yesterday's session, ending $1.40 down at $106.03.

Reports that Iraq's army had recaptured lost ground from the militants seemed to put the energy markets at a temporary ease.

Additionally, US Secretary of State John Kerry provided some extra reassurances at his meeting with Iraqi Prime Minister Nouri al-Maliki.

Gold market participants remained in bullish mode after the Fed's meeting and continued to push the precious metal $3 higher for the day to $1,318.2.

One thing that is worth noting is that with geopolitical tensions in Ukraine, Syria and Iraq unlikely to end soon, demand for a safe haven asset could well provide support for a considerable period of time.



Commodities Trading

: 23 June 2014

In the energy complex, US President Barack Obama has said that he's sending military advisers to Iraq and is prepared to take additional steps to assist the Iraqi army.

As a consequence of those signs of escalation, there's rising concern about potential oil supply disruptions which continued to offer good support and sent US crude $0.53 higher to $106.63.

Whilst gold saw its biggest weekly gain in 4 months, investors played it safe ahead of weekend and took some profits off table on Friday, seeing the precious metal drop by $5.6 to $1,314.5.

Despite the dip at the end of the week, the Federal Reserve's dovish statement seems to have revived demand for gold as a hedge against inflation and a wealth preservation tool.


By Jonathan Sudaria, 4 July 2014


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