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Commodities: Crude dives after US inventories; gold falls on Fed rate-rise views

By Andrew Schonberg

Date: Thursday 09 Mar 2017

Commodities: Crude dives after US inventories; gold falls on Fed rate-rise views

(ShareCast News) - Crude-oil futures have been shaken lower as lingering worries about the global glut of the black liquid heightened after hefty rises in US inventories on Wednesday.
At 15:16 GMT, Nymex-priced West Texas Intermediate crude was down 1.05% to $49.75 a barrel, and Intercontinental Exchange-traded Brent was down 0.62% to $52.63 a barrel.

Separate figures this week from the US Energy Information Administration and American Petroleum Institute revealed large rises in Stateside stores of crude.

This forced crude's prices down on Wednesday, and again so on Thursday.

"Worries about a supply glut have hit oil prices," said Nicholas Hyett of Hargreaves Lansdown.

Oanda senior market analyst Craig Erlam said the EIA and API data had triggered significant losses over the last 24 hours, and a break below the range of the last three months.

"With the downside now taken out, we could well see further losses ahead for Brent and WTI, with $50 and $47.35 (respectively) being the next major tests," said Erlam

"Oil producers may have been patting themselves on the back in recent months about the success of the output cut, with compliance much higher than many expected, but with prices looking weaker once again, an extension to the deal may be more of a necessity than an option."

Meantime, on Comex, gold was down 0.25% to $1206.4 an ounce, with silver down 0.36% to $17.24 an ounce and copper down 0.73% to 258.15 cents a pound.

Accendo Markets head of research Mike van Dulken noted the yellow metal had extended its correction to near $1200.

"Although major support may be lacking until $1180," he added.

FXTM research analyst Lukman Otunuga said gold had suffered a pummeling this week, having touched a five week low of $1203.13 on Thursday.

This was market expectations for a US Federal Reserve rate hike counted against the metal, which is traditionally regarded as a safe-haven asset and often runs counter to the dollar.

"The downside momentum remains healthy with steeper declines expected in the short term if (US) non-farm payrolls exceeds expectations on Friday," said Otunuga in a statement.

"From a technical standpoint, gold is under intense pressure with previous support around $1210 acting as a light resistance for a decline lower towards $1200.

"A solid breakdown below $1200 could open a path towards the next relevant support at $1190."

Three-month industrial metals on London Metals Exchange were mixed. Tin was flat, while zinc and aluminum prices rose and that for copper slipped.

Among agriculturals, Chicago Board of Trade-priced corn was flat at 372.25 cents a bushel, with wheat up 0.22% to 448.0 cents a bushel.

On ICE, cocoa was down 0.42% to $1904 a MT, with cotton No.2 down 0.1% to 78.01 cents a pound. Live cattle rose 0.66% to 106.95 cents a pound.

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