Oil
On Tuesday, the crude oil decreased moderately prior to short term ranging marks from the weekly data on oil reserves in the USA. By the end of the deals on the New York Stock Exchange the June futures on sweet crude oil rose by 43 cents to 76,37 dollars per barrel. Prior to this were trading in a wide range between 75,53 and 77,68 dollars per barrel. June futures for Brent oil increased by 37 cents to 80,49 dollars per barrel.
After a sharp fall by 11 dollars per barrel in the last 4 days of the week, the oil futures managed to regroup. Now the futures are traded in a wide diapason orienting to the stock indices which were fluctuating slightly on Tuesday between negative and positive ranges. In a short term the market will orient to the weekly data on the US oil reserves which are expected to testify about a small reserves upgrowth, as during the week May 1-7 petroleum refiners eased their activity. According to the analytical forecasts, the crude oil reserves boosted by 800 000 barrels, gasoline reserves – by 500 000 barrels and distillatory reserves including the diesel fuel and residual oil gained 1,2 million barrels.
Record volume of oil reserves in the USA continue putting the downward pressure on oil future prices with the nearest maturity date. Longer contracts showed an uptrend. There are talks in the market that raw funds were selling the oil futures with the nearest delivery date and were buying the futures with the longer date of performance that has become typical for this period of time. On Tuesday, the June futures closed by 3,85 dollars lower than July contract. This is the biggest difference between the contracts from February 13, 2009.
Gold
On Tuesday, Gold futures reached the historical high that has become a symptom of massive investors fears concerning the markets and the global economy. The yellow metal traditionally plays the role of “sanctuary asset” which is used by the investors during stressful situations on the markets. The Gold popularity when it became clear that a steady recovery after a recent global recession will be a long and exhausting process. Now the investors are also worried because of the default possibility in the Eurozone countries. The May contract price for Gold spiked up by 19,50 dollars or by 1,6% to 1219,90 dollars per ounce exceeding the previous historical high at 1227,50 dollars also touched on December 3. During the electronic deals after the residential session end the contract price soared to 1233,50 dollars fixing a new intra-day record high.
The doubts regarding the economic future of Europe reminded about themselves after that earlier this week they weakened due to the rescue plan adoption for the Eurozone countries in the amount of 1 trillion dollars. It may seem that these extra measures can be not enough to control the crisis within the Euro area. The Gold price has been rising steadily for several years, in respond to the US dollar erosion. It makes the investors seek safety in Gold due to American currency weakness. The dollar easing solidified the Gold making it cheaper for wider range of world investors who push up its cost. Nevertheless, last weeks the Gold price was escalating together with the dollar rate amid the debt crisis in the Eurozone. Recently, the Gold price upturn has been prompting the fears regarding the liquidity flowed into the global financial system by the central banks. In line with the public sector spending it can lead to inflation. The investors are guessing if the countries ratings continue lowering and if they are able to repay the loans obtained within the support programs. There is a consideration that the European plan can help to win the time, but it is not able to correct the situation with the budget deficits in a long term prospect.
