Oil Futures Decline as US Driving Season Fails to See Demand Keep Up With Supply

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Financial Spreads: Spread Betting and CFD Trading


Commodities Trading

: 11 July 2014

US crude recovered by $0.94 to $102.87 after the previous day's steep selloff.

Bargain hunting may have been a supportive factor but we have also seen growing speculation that a resilient US economy will boost demand for fuel.

Turmoil in Portugal undoubtedly spurred safe haven demand, which in turn supported gold prices.

A slump in equities exacerbated the move, with the precious metal gaining $11 for the day to $1,335.4, a 16 week high.



Commodities Trading

: 10 July 2014

Whilst the US has entered driving season, consumption in the world's largest oil user has failed to keep up with supply, meaning that gasoline inventories have pushed higher.

With geopolitical tensions also becoming less of a concern, US crude oil prices posted a sharp decline yesterday, losing $1.53 to $101.93.

Concerns that we are returning to a regime of excessive risk taking, as highlighted by the FOMC meeting minutes, has reignited demand for a safe haven.

This is good news for the gold market, which rallied by $7.2 to $1,326.9.

In fact, with a move back above the $1,330 mark, the precious metal still appears to be going strong this morning.



Commodities Trading

: 09 July 2014

Yesterday's recovery in WTI prices felt like a dead cat bounce, with the market closing just $0.07 higher at $103.47 after briefly crossing above the $104 mark in intraday trading.

It seems that some energy investors were reluctant to take a position ahead of the latest Fed minutes and the release of the weekly oil inventories.

We saw another rather quiet day in gold trading as investors are still trying to estimate the timing of an interest rate hike.

The yellow metal closed unchanged at $1,319.7 as a sell off in equities failed to attract any interest in precious metals.



Commodities Trading

: 08 July 2014

US crude oil continued its slump yesterday, closing $0.32 down at $103.40 per barrel despite forecasts for a rise in demand.

This came as Libya stated that it is ready to immediately export 7.5 million barrels of crude, and as the picture in Iraq seemed to soften.

Energy prices are also being impacted by the overall perception that the US dollar is on the rise.

As one would expect, speculation about an early hike in interest rates certainly does not bode well for gold.

Indeed, the precious metal saw its price drop by $1.3 to $1,320.0 yesterday but there may still be enough support to oppose the larger corrections ahead of the FOMC minutes.



Commodities Trading

: 07 July 2014

Ongoing strength for the US dollar continued to put downside pressure on US crude, which lost another $0.30 to $103.77 per barrel.

At the same time, energy spread trading investors have been slowly unwinding the Middle Eastern premium as it becomes clearer that oil output disruptions have been minimal thus far.

Gold prices were largely in check on Friday, closing rather unchanged at $1,321 as investors were reluctant to commit too much in either direction.

A fall in German factory orders did provide some support, but the strong dollar counterbalanced that.


By Jonathan Sudaria, 11 July 2014


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