FX.co ★ Crude oil and Gold review

Crude Oil

Crude oil futures closed downside on Wednesday as the USA oil reserves continued increasing.

The October contract on light-weight sweet oil fell by 62 cents or 0,9%, to 71,43$ per barrel at the New York Commodity Exchange. Quotations of Brent oil futures decreased by 17 cents to 71,65$ per barrel.

The possibility of return to the 10-month high of 75 dollars per barrel, reached on Tuesday, began to look more and more remoted after the US Department of Energy reported the growth of crude oil reserves by 100 000 barrels. Reserves are larger on 15 % than they were one year ago whereas the oil demand decreased by 0,9 % for four weeks, came to the end on August, 21. Analysts predicted the reduction of crude oil reserves by 600 000 barrels.

Only the prospects of future demand growth because of economy restoration keep the crude oil prices approximately between 65 and 75 dollars per barrel during last two months. The USA stock indexes which are considered as the key leading indicator for the oil market remain near to the maximum of 2009, though they traded without changes on Wednesday.

Taking into account the probability of the fact, that economy restoration in the USA, Europe and Japan will pass gradually, traders stake on fast growth of oil consumption in China which will allow them to bridge a current gap between the supply and demand.

Gold

Gold futures closed almost without changes on Wednesday, only with insignificant fall. Yellow metal reacted to the US dollar growth, but as a whole continued the consolidation under conditions of low trading volume.

The December contracts on gold decreased by 20 cents to 945,80$ per ounce at COMEX. The December contracts on silver fell by 5,8 cents to 14,288$ per ounce following the trading results.

The metals prices were under the moderate pressure during the most part of the day that became the response to the dollar strengthening against more powerful, than it was expected, data on new home sales and the durable goods orders in the USA.

As a whole, it is possible to assert that the trading basically passed in ranges. This situation remains already for a quite long time. The market is hold down between the signs of some improvement in economy and financial system and continuing doubts.

Kind regards,
Analyst: Vladimir Donin.