Commodities Trading: 05 December 2014
Slowly but surely WTI crude continues to decline, with the market losing another $0.68 to $66.74 yesterday.
By failing to agree on production cuts, OPEC has accelerated the sell off.
At the same time, several commentators suspect that they want to find out how well the US shale oil producers can cope with lower prices.
After all, it has already been suggested that some the smaller producers are starting to struggle.
Lately, it seems that any rally above the $1,200 mark for gold has limited potential.
The bears came out yesterday and pushed the precious metal $3.5 lower to $1,205.6.
At the time of writing, the market has continued to decline, looking like it's on its way to retest $1,200 once again.
Commodities Trading: 04 December 2014
The weekly US stockpiles report indicated a draw of 3.7 million barrels in crude oil inventories last week, compared with expectations for a build of 1.1 million barrels.
However, as supply is generally overshadowing slumping oil demand, the data only helped to slow the sell off, although whether the support is only temporary remains to be seen.
Either way, WTI crude closed just $0.20 in the red at $67.41.
A strengthening stock market
and investor optimism regarding the US economy brought back questions of whether the world has become a bit too complacent.
So market participants made a step back, returning to gold as a store of value and pushing its price $11.6 higher to $1,209.1.
Commodities Trading: 03 December 2014
As if oil supplies were not plentiful enough already, it appears that Iraqi government and Kurdish officials have reached an agreement to increase crude exports.
The potential impact on this additional supply easily triggered another sell off in US crude, which lost $1.62 to $67.63 per barrel.
Going forward, many investors are wondering whether the Saudis are prepared to give up some market share by making the first production cut?
Or is the US more likely to blink first?
failed to remain above the $1,200 mark yesterday, dropping $15.3 to $1,197.7.
The culprits were the usual suspects, a strengthening dollar and a higher stock market which again stole the show when it came to investor interest.
Commodities Trading: 02 December 2014
After nose-diving for five days in a row, WTI crude oil finally posted a retracement, gaining $3.31 to $69.31 per barrel.
However, the bigger picture has hardly changed as the shale boom in the US continues to drive oil supplies higher, whilst global growth cannot keep up.
As a result, it was little surprise to see a resumption of the falls this morning.
Amid a rebound in the oil markets, we also saw a significant one day rally in gold, which gained $52.3 to $1,211.9.
The gains came after an initial drop on the open following Swiss voters' rejection of plans to top-up their reserves, which could indicate that participants are keeping an eye on gold as a hedge against tough times.
Commodities Trading: 01 December 2014
Saudi Arabia's Oil Minister confirmed that OPEC had kept the production ceiling of 30 million barrels per day unchanged.
In a world already awash with supplies, this certainly did not bode well for crude prices which showed no sign of stopping their slump.
The US crude market lost another $2.85 to reach $66.08 per barrel as the game now seems to have a new name; survival of the fittest.
Amid a stronger dollar and falling crude futures, investors also dumped gold, which lost a significant $23.9 to $1,166.
As if things were not gloomy enough, over the weekend, Swiss voters rejected measures to force their central bank to buy more gold, sending the metal further south.
So this early morning the precious metal is trading around $1,150 mark.
The information and comments provided herein under no circumstances are to be considered an offer or solicitation to invest and nothing herein should be construed as investment advice. The information provided is believed to be accurate at the date the information is produced.
By Jonathan Sudaria, 5 December 2014