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22 Oct 2013
Oil sits below $100, gold consolidates
FXstreet.com (Athens) – Oil continues to set up a bearish tone on Thursday amidst a broader dollar recovery, while gold consolidates around 1316 area.
Oil in both sides of Atlantic is trading lower and precisely US Crude Oil falls below $100/brl (down 1.68%) for a second consecutive day (apart from yesterday, crude oil price below $100/brl was last seen at the 3rd July as of 2013), while Brent Oil is also moving south at $109.79/brl (down 0.29%). Market participants could find a couple of reasons to attribute oil’s downtrend behavior. First of all, there is broader American dollar recovery which is boosted since the kick off of the Asian trading session, mostly due to a probable correction as well as on profit taking ahead of NFP. Furthermore, OPEC’S Badri mentioned that “Oil inventories are healthy, there is a little impact from North Africa oil supply halts, while group’s spare capacity is at comfortable levels.” It seems that Badri’s quotes eased further oil prices, as after he mentioned the above, crude oil price dragged below $100/brl. Last pertaining to oil, we should take into consideration that the past week, Brent and U.S. oil settled 1.2 percent lower, after a sharp fall on Thursday that was fueled by signs of progress around talks between Tehran and the West over Iran's nuclear program. On the other hand, gold is consolidating its recent uptrend momentum hovering at 1316.00, totally muted. Furthermore, Morgan Stanley said that “Supply outages continue to decline and crude demand remains challenged”, adding as well that “oil refineries margins are poor while the Chinese demand fell sharply in September for the time the past 17 months.” All in all, Morgan Stanley suggests “that a sustained weak dollar will support oil prices as it makes dollar denominated oil cheaper to acquire”.
Oil in both sides of Atlantic is trading lower and precisely US Crude Oil falls below $100/brl (down 1.68%) for a second consecutive day (apart from yesterday, crude oil price below $100/brl was last seen at the 3rd July as of 2013), while Brent Oil is also moving south at $109.79/brl (down 0.29%). Market participants could find a couple of reasons to attribute oil’s downtrend behavior. First of all, there is broader American dollar recovery which is boosted since the kick off of the Asian trading session, mostly due to a probable correction as well as on profit taking ahead of NFP. Furthermore, OPEC’S Badri mentioned that “Oil inventories are healthy, there is a little impact from North Africa oil supply halts, while group’s spare capacity is at comfortable levels.” It seems that Badri’s quotes eased further oil prices, as after he mentioned the above, crude oil price dragged below $100/brl. Last pertaining to oil, we should take into consideration that the past week, Brent and U.S. oil settled 1.2 percent lower, after a sharp fall on Thursday that was fueled by signs of progress around talks between Tehran and the West over Iran's nuclear program. On the other hand, gold is consolidating its recent uptrend momentum hovering at 1316.00, totally muted. Furthermore, Morgan Stanley said that “Supply outages continue to decline and crude demand remains challenged”, adding as well that “oil refineries margins are poor while the Chinese demand fell sharply in September for the time the past 17 months.” All in all, Morgan Stanley suggests “that a sustained weak dollar will support oil prices as it makes dollar denominated oil cheaper to acquire”.