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31 Oct 2013

Crude Oil futures fall to four-week low


                   Crude Oil futures traded lower during Thursday’s Asian session following more tepid U.S. economic data and a concerning weekly inventories report. 

On the New York Mercantile Exchange, light, sweet crude futures for December delivery fell 0.22% to USD96.56 per barrel, near a four-week low, in Asian trading Thursday. The December contract settled lower by 1.46% at USD96.77 per barrel Wednesday. 

The U.S. Energy Information Administration said in its weekly report that U.S. crude oil inventories rose by 4.1 million barrels in the week ended Oct. 25, well above expectations for an increase of 2.3 million barrels. Total U.S. crude oil inventories stood at 383.9 million barrels, the highest level since June.

The report also showed that total motor gasoline inventories declined by 1.7 million barrels, compared to expectations for a drop of 140,000 barrels. 

The elevated inventories data indicate U.S. oil demand is not where it should be at this point in an economic recovery and that could be a sign lower prices are ahead. 

In U.S. economic news out Wednesday, the ADP private sector payroll survey showe U.S. non-farm private employment rose by a seasonally adjusted 130,000 in October, below expectations for an increase of 150,000. 

The previous month’s figure was revised down to a gain of 145,000 from a previously reported increase of 166,000.

A separate report showed that U.S. consumer prices rose 0.2% in September, in line with forecasts, after rising by 0.1% in August. 

Meanwhile, Italian oil giant Eni said it expects lower oil and gas output this year due to production issues in OPEC states Libya and Nigeria. 

Elsewhere, Brent crude futures for December delivery fell 0.34% to USD109.58 per barrel on the ICE Futures Exchange. - investing.com

Gold trades lower post-Fed


               Gold futures traded lower during Thursday’s Asian session even after the Federal Reserve made no material alterations to its monetary policy following the conclusion of its two-day meeting Wednesday. 

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery lost 0.77% to USD1,338.90 per troy ounce in Asian trading Thursday. The December contract settled higher by 0.28% at USD1,349.30 per ounce on Wednesday. 

The Federal Reserve on Wednesday left its key benchmark lending target, the fed funds rate, unchanged at 0.25% and kept its USD85 billion monthly asset-purchasing program in place. 

Although the Fed said the U.S. economy, the world’s largest, is showing signs of improvement, it did say fiscal policy is standing in the way of a more impressive recovery. 

"Economic activity has continued to expand at a moderate pace. Indicators of labor market conditions have shown some further improvement, but the unemployment rate remains elevated," the Fed said in a statement. 

"Available data suggest that household spending and business fixed investment advanced, while the recovery in the housing sector slowed somewhat in recent months. Fiscal policy is restraining economic growth." 

The central bank go no overt time table for when it might taper its easing program, though many market participants expect tapering will commence late in the first quarter of 2014. 

In U.S. economic news out Wednesday, the ADP private sector payroll survey showe U.S. non-farm private employment rose by a seasonally adjusted 130,000 in October, below expectations for an increase of 150,000. 

The previous month’s figure was revised down to a gain of 145,000 from a previously reported increase of 166,000.

A separate report showed that U.S. consumer prices rose 0.2% in September, in line with forecasts, after rising by 0.1% in August. 

Elsewhere, Comex silver for December delivery slipped 2.11% to USD22.498 per ounce while copper for December delivery fell 0.08% to USD3.313. - investing.com


30 Oct 2013

Crude oil futures slip ahead of U.S. supply data, FOMC decision


              Crude oil futures declined on Wednesday, as traders looked ahead to the release of key U.S. weekly supply data while awaiting the outcome of the Federal Reserve’s monetary-policy meeting.

On the New York Mercantile Exchange, light sweet crude futures for delivery in December traded at USD97.51 a barrel during European morning trade, down 0.7%. 

New York-traded oil futures traded in a range between USD97.41 a barrel, the daily low and a session high of USD98.20 a barrel.

The December contract ended 0.49% lower on Tuesday to settle at USD98.20 a barrel.

Oil futures were likely to find support at USD95.95 a barrel, the low from October 24 and resistance at USD98.80 a barrel, the high from October 28.

Oil traders were awaiting data from the U.S. government on oil and fuel supplies later in the day to gauge the strength of demand from the world’s largest oil consumer.

The report was expected to show that U.S. crude oil stockpiles rose by 2.3 million barrels in the week ended October 25, while gasoline inventories were forecast to fall by 140,000 barrels.

After markets closed Tuesday, the American Petroleum Institute, an industry group, said that U.S. crude inventories increased by 5.9 million barrels last week, while gasoline stockpiles rose by 740,000 barrels.

U.S. crude prices have been on a downward trend in recent weeks amid concerns the recent U.S. government shutdown created a drag on economic growth and eroded demand in the world’s largest oil consumer.

The Fed is scheduled to conclude its two-day policy-meeting later Wednesday, with market analysts expecting the central bank to keep its USD85 billion-a-month asset-purchase program on track in order to safeguard the faltering economic recovery.

Data released on Tuesday showed that U.S. consumer confidence dropped to a six-month low of 71.2 in October from a reading of 80.2 in September, as concerns over the U.S. government shutdown and the debt ceiling crisis weighed.

The U.S. was to release data on private sector payrolls later Wednesday, ahead of the U.S. employment report for October, due for release on November 8.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for December delivery dipped 0.2% to trade at USD108.80 a barrel, with the spread between the Brent and crude contracts standing at USD11.29 a barrel. - investing.com

Gold futures little changed in rangebound trade ahead of Fed



               Gold prices were little changed on Wednesday, as market players looked ahead to the conclusion of the Federal Reserve’s policy meeting later in the day.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,345.10 a troy ounce during European morning trade, down 0.03%. 

Prices traded in range between USD1,338.70 a troy ounce, the daily low and a session high of USD1,348.40 a troy ounce. 

The December contract ended 0.5% lower on Tuesday to settle at USD1,345.10 a troy ounce.

Gold futures were likely to find support at USD1,329.50 a troy ounce, the low from October 23 and resistance at USD1,361.70, the high from October 28.

The Fed is scheduled to conclude its two-day policy-meeting later Wednesday, with market analysts expecting the central bank to keep its USD85 billion-a-month asset-purchase program on track in order to safeguard the faltering economic recovery.

Data released on Tuesday showed that U.S. consumer confidence dropped to a six-month low of 71.2 in October from a reading of 80.2 in September, as concerns over the U.S. government shutdown and the debt ceiling crisis weighed.

The U.S. was to release data on private sector payrolls later Wednesday, ahead of the U.S. employment report for October, due for release on November 8.

Gold traders have closely been looking out for U.S. data reports recently to gauge if they will strengthen or weaken the case for the Fed to reduce its bond purchases.

Prices of the precious metal have largely tracked shifting expectations as to whether the Fed would start tapering its USD85-billion-a-month asset-purchase program by the end of the year.

Elsewhere on the Comex, silver for December delivery rose 0.85% to trade at USD22.68 a troy ounce, while copper for December delivery rallied 1.2% to trade at USD3.317 a pound. - investing.com


Crude Oil futures trade lower after tepid U.S. data


        Crude Oil futures traded lower during Wednesday’s Asian session as traders in the region digest another batch of mediocre U.S. economic data. 

On the New York Mercantile Exchange, light, sweet crude futures for December delivery fell 0.56% to USD97.65 per barrel in Asian trading Wednesday. The December contract settled down 0.49% at USD98.20 per barrel on Tuesday. 

In U.S. economic news out Tuesday, the Conference Board said its index of consumer confidence dropped to 71.2 in October from an upwardly revised reading of 80.2 in September. Analysts were expecting the index to fall to 75.0 this month. 

The Commerce Department U.S. retail sales fell 0.1% in September, while core retail sales, which exclude transportation items and gasoline, rose 0.4%, both in line with expectations.

Separately, the Labor Department reported that the country's producer price index contracted 0.1% in September, defying gains for a 0.2% gain. 

Earlier Tuesday, British oil giant said its net profit fell to $3.5 billion in the third quarter from $5.28 billion last year. The company said it plans to sell $10 billion in assets before the end of 2015. BP produced 3.17 million barrels of oil equivalent per day in the quarter. 

In other oil news, reports out Tuesday evening indicated U.S. policymakers are considering new sanctions against Iran that could slash the OPEC member’s oil exports by 50% over the next year. 

Since the beginning of 2012, U.S. and European sanctions have already cut Iran's oil exports to about 1 million bpd from about 2.5 million bpd, Reuters reported. 

Elsewhere, Brent futures for December delivery fell 0.20% to USD108.60 per barrel on the ICE Futures Exchange.

Gold lower ahead of Fed announcement


              Gold futures traded lower during Wednesday’s Asian session as traders await the conclusion of the Federal Reserve’s two-day meeting later Wednesday. 

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery fell 0.15% to USD1,343.50 per troy ounce in Asian trading Wednesday. The December contract settled lower by 0.50% at USD1,345.50 per ounce on Tuesday. 

Gold futures were likely to find support at USD1,310.10 a troy ounce, the low from Oct. 22, and resistance at USD1,361.70, Monday's high. 

Gold was glossed over even amid slack U.S. data points. In U.S. economic news out Tuesday, the Conference Board said its index of consumer confidence dropped to 71.2 in October from an upwardly revised reading of 80.2 in September. Analysts were expecting the index to fall to 75.0 this month. 

The Commerce Department U.S. retail sales fell 0.1% in September, while core retail sales, which exclude transportation items and gasoline, rose 0.4%, both in line with expectations.

Separately, the Labor Department reported that the country's producer price index contracted 0.1% in September, defying gains for a 0.2% gain. 

While the recent batch of U.S. data has not been terrible, it has been tepid enough to stoke speculation the Fed has no choice but to keep its USD85 billion-per-month quantitative easing program in place. 

The central bank has previously said tapering of its bond-buying program is not tied to a fixed schedule, but rather to the quality of U.S. data points. 

Elsewhere, Comex silver for December delivery fell 0.08% to USD22.473 an ounce while copper for December delivery lost 0.07% to USD3.278 per ounce. - investing.com

Natural gas prices fall on mild weather forecasts


            Natural gas prices extended Monday's losses into Tuesday as updated weather-forecasting models continued to call for mild temperatures to settle in across the eastern half of the U.S. for the middle of November.

On the New York Mercantile Exchange, natural gas futures for delivery in December traded at USD3.620 per million British thermal units during U.S. trading, down 1.13%. 

The commodity hit a session low of USD3.611 and a high of USD3.684.

The December contract settled down 3.96% at USD3.661 per million British thermal units on Monday.

Futures were likely to find support at USD3.557 per million British thermal units, Thursday's low, and resistance at USD3.869, the high from Oct. 16.

Weather-forecasting models on Tuesday continued to predict that currently cool temperatures in the Midwest and Eastern U.S. will give way to largely mild temperatures over the next six to 10 days.

Milder temperatures cut into the need for heating or air conditioning this time of year, lowering demand for natural gas at the nation's thermal power generators.

Meanwhile, U.S. supply levels also remained in focus. Total U.S. natural gas storage stood at 3.741 trillion cubic feet as last week, 2.4% below last year's unusually high level but 2.1% above the five-year average for this time of year.

Early injection estimates for this week’s storage data range from 20 billion cubic feet to 43 billion cubic feet, compared to a 66 billion cubic feet increase during the same week a year earlier.

The five-year average for the week is a build of 57 billion cubic feet.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in December were down 0.57% and trading at USD98.12 a barrel, while heating oil for December delivery were down 0.13% and trading at USD2.9604 per gallon. - investing.com

5 Oct 2013

Gold falls as investors mull fate of U.S. government shutdown


          Gold prices moved lower on Friday as investors avoided the precious metal as a government shutdown dragged on with no end in sight and left markets without a key indicator due for release.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,307.90 during U.S. afternoon hours, down 0.74%.

Gold prices hit a session low of USD1,306.40 a troy ounce and high of USD1,324.70 a troy ounce.

Gold futures were likely to find support at USD1,278.20 a troy ounce, Wednesday's low, and resistance at USD1,375.10, the high from Sept. 19.

The December contract settled down 0.23% at USD1,317.60 a troy ounce on Thursday.

An ongoing U.S. government shutdown prevented the Bureau of Labor Statistics from releasing the September jobs report on Friday.

Unemployment figures drive gold prices by giving markets indications as to when the Federal Reserve will begin unwinding stimulus measures, which have elevated prices for years by weakening the dollar.

Gold and the dollar tend to trade inversely with one another.

Elsewhere, many investors began to view the dollar as oversold and snapped up nicely priced greenback positions, which sent gold falling further.

Markets were also considering how the political deadlock will affect negotiations to raise the U.S. debt ceiling, which the U.S. Treasury Department has estimated will be reached by Oct. 17.

International Monetary Fund head Christine Lagarde said earlier that failure to raise the U.S. debt ceiling could hurt the global economy and warned U.S. growth could drop below 2% this year. 

Elsewhere on the Comex, silver for December delivery was down 0.34% at USD21.712 a troy ounce, while copper for December delivery was up 1.01% and trading at USD3.302 a pound. - investing.com

Crude gains as Tropical Storm Karen bears down on Gulf Coast


           Crude prices rose on Friday as Tropical Storm Karen continued to bear down on the energy-rich U.S. Gulf Coast prompting oil-rig evacuations ahead of time.

On the New York Mercantile Exchange, light sweet crude futures for delivery in November traded at USD103.50 a barrel during U.S. trading, up 0.18%. 

The commodity hit a session low of USD102.89 and a high of USD104.17.

The November contract settled down 0.76% at USD103.31 a barrel on Thursday.

At the time of writing, Karen's maximum sustained winds were at 50 miles per hour and Tropical Storm Warning flags were flying along the Gulf Coast.

While the storm appeared weaker than in previous forecasts, the system was still strong enough to prompt energy companies to begin evacuating rigs and shut down production.

Capping gains, however, was a U.S. government shutdown that began earlier this week due to congressional inability to agree on a spending package, which kept close to a million government workers off the job and without pay.

Fears the shutdown, fiscal drag and uncertainty in general will weigh on recovery and crimp demand for fuel and energy capped oil's gains on Friday.

The session was previously scheduled to see the release of the U.S. September jobs report, which tends to move oil prices by painting a picture of U.S. economic strength.

The Bureau of Labor Statistics said on its web site that it was not collecting data, issuing reports, or responding to public inquiries due to suspension of federal services.

Markets were also mulling how the U.S. political deadlock will affect negotiations to raise the U.S. debt ceiling, which the U.S. Treasury Department has estimated will be reached by Oct. 17. 

International Monetary Fund head Christine Lagarde said earlier that failure to raise the U.S. debt ceiling could hurt the global economy and warned U.S. growth could drop below 2% this year. 

Meanwhile on the ICE Futures Exchange, Brent oil futures for November delivery were up 0.05% at USD109.06 a barrel, up USD5.56 from its U.S. counterpart. - investing.com

Natural gas prices gain as tropical storm bears down on Gulf Coast


                         Natural gas prices rose on Friday as Tropical Storm Karen chugged closer to the energy-rich U.S. Gulf of Mexico coast, prompting offshore rig evacuations ahead of time, which crimps supply.

On the New York Mercantile Exchange, natural gas futures for delivery in November traded at USD3.515 per million British thermal units during U.S. trading, up 0.44%. 

The commodity hit a session low of USD3.494 and a high of USD3.535.

The November contract settled down 1.21% at USD3.499per million British thermal units on Thursday.

At the time of writing, Karen's maximum sustained winds were at 50 miles per hour and Tropical Storm Warning flags were flying along the Gulf Coast.

While the storm appeared weaker than in previous forecasts, the system was still strong enough to prompt energy companies to begin evacuating rigs on Thursday.

The Gulf of Mexico is home to 10% of U.S. natural gas production.

A bearish supply report capped gains, however.

The U.S. Energy Information Administration said in its weekly report on Thursday that natural gas storage in the U.S. in the week ended Sept. 27 rose by 101 billion cubic feet, above market expectations for an increase of 94 billion cubic feet.

Inventories increased by 77 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a build of 82 billion cubic feet.

Total U.S. natural gas storage stood at 3.487 trillion cubic feet as of last week. Stocks were 155 billion cubic feet less than last year at this time and 49 billion cubic feet above the five-year average of 3.438 trillion cubic feet for this time of year.

The report showed that in the East Region, stocks were 106 billion cubic feet below the five-year average, following net injections of 58 billion cubic feet. 

Stocks in the Producing Region were 102 billion cubic feet above the five-year average of 1.056 billion cubic feet after a net injection of 33 billion cubic feet.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in November were up 0.22% and trading at USD103.54 a barrel, while heating oil for November delivery were down 0.48% and trading at USD2.9888 per gallon. - investing.com

4 Oct 2013

Crude Oil trades lower as U.S. shutdown stretches another day


          Crude Oil futures traded lower during Friday’s Asian session amid a batch of disappointing economic data and an ongoing government shutdown that threatens to imperil the world’s largest economy. 

On the New York Mercantile Exchange, light, sweet crude futures for November delivery fell 0.15% to USD103.15 per barrel in Asian trading Friday. The November contract settled lower by 0.76% at USD103.31 per barrel on Thursday. 

The U.S. government shutdown has carried on for the third day in a row, as House Republicans are still unable to strike a deal on spending cuts with the Senate Democrats. A shooting near Capitol Hill, which was later on considered an isolated incident, also kept risk-taking in check. 

In U.S. economic news out Thursday, the ISM non-manfacturing PMI showed a sharper than expected decline from 58.6 to 54.4, lower than the consensus at 57.4. 

Separately, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending Sept. 28 rose by 1,000 to a seasonally adjusted 308,000, better than analysts' calls for jobless claims to rise by 6,000 to 313,000 last week. 

Due to the government shutdown, it is widely expected that the U.S. non-farm payroll data for September will not be released Friday as was previously scheduled. 

President Barack Obama met with Republican and Democratic leaders in Congress on Wednesday to discuss ways out of the impasse, although a solution still seemed unlikely. 

Elsewhere, Brent crude futures for November delivery rose 0.10% to USD108.76 per barrel on the ICE Futures Exchange. - investing.com

Natural gas prices fall on supply report, tropical storm supports

  

                 A bearish inventory report sent natural gas prices falling on Thursday, though the formation of Tropical Storm Karen in the energy-rich Gulf of Mexico curbed losses somewhat.

On the New York Mercantile Exchange, natural gas futures for delivery in November traded at USD3.531 per million British thermal units during U.S. trading, down 0.32%. 

The November contract settled down 1.86% at USD3.542 per million British thermal units on Wednesday.

The commodity hit a session low of USD3.494 and a high of USD3.570.

The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended Sept. 27 rose by 101 billion cubic feet, above market expectations for an increase of 94 billion cubic feet.

Inventories increased by 77 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a build of 82 billion cubic feet.

Total U.S. natural gas storage stood at 3.487 trillion cubic feet as of last week. Stocks were 155 billion cubic feet less than last year at this time and 49 billion cubic feet above the five-year average of 3.438 trillion cubic feet for this time of year.

The report showed that in the East Region, stocks were 106 billion cubic feet below the five-year average, following net injections of 58 billion cubic feet. 

Stocks in the Producing Region were 102 billion cubic feet above the five-year average of 1.056 billion cubic feet after a net injection of 33 billion cubic feet.

The news sent gas prices falling earlier, though forecasts for colder weather and even snow to settle in over the central U.S. curbed losses.

Demand for natural gas tends to rise at the country's thermal power plants as temperatures drop, as homes and businesses throttle up on their heaters.

Also curbing loss was news that Tropical Storm Karen formed in the Gulf of Mexico near Mexico's Yucatan Peninsula with winds of 60 miles per hour.

The storm was forecast to reach hurricane strength before washing ashore as a strong tropical storm somewhere along the Louisiana, Mississippi, Alabama or Florida coast.

At the time of writing, a Hurricane Watch was in effect for Grand Isle, Louisiana, to Indian Pass Florida.

Tropical weather systems often disrupt production by prompting gas rig operators to evacuate offshore facilities.

The Gulf of Mexico is home to 10% of U.S. natural gas production.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in November were down 0.76% and trading at USD103.31 a barrel, while heating oil for November delivery were down 0.11% and trading at USD2.9895 per gallon. - investing.com

3 Oct 2013

The FOMC May Need To Add Stimulus To Offset Shutdown

fomc

      For weeks traders have talked “tapering”. They were almost sure it would have begun last month, now they were expecting big news this month. Others were saying by the end of the year. But everyone was sure tapering would begin soon. That was until the impossible happened. The US government has shut down. Most speculators figured US politicians were playing theatrics and would come up with a last minute agreement as they do all the time but this time they seem to have out maneuvered themselves. Putting themselves in a bind. The noose is now tightening as the budget crisis becomes ensnared with the debt ceiling negotiations.
The Federal Reserve is not funded by the budget and will therefore remain operational, which means that we will continue to hear from Fed speakers. Yesterday, traders were shaken when a Fed member suggested that the FOMC might need to add additional stimulus to help the government recover from the economic damage caused by the shutdown.  Caught in the middle of this confusion are precious metals. Gold and silver have been trading all over the place. Gold is trading at 1312.00 down by $8.70 this morning. Gold climbed over the 1320 level yesterday as traders took advantage of the steep decline on Monday and the weak US dollar to buy up the commodity.

The most actively traded contract, for December delivery, on Wednesday settled up $34.60, or 2.7 per cent, at $1,320.70. The US federal government closure moved into a second day as Democrats and Republicans remained deadlocked over a budget for the fiscal year, which started on October 1. Some investors are now worried that the shutdown will last longer than expected, leading to terser negotiations over the US debt ceiling in mid-October. Gold traded near two-month lows on Wednesday as the first US government shutdown in 17 years kept investors on edge, stoking worries of further liquidation after a sharp 3 percent drop in the previous session. Bullion posted its biggest daily percentage drop in more than two weeks on Tuesday following a massive Comex sell order and technical selling once prices fell below $1,300 an ounce. For the year, gold has shed about 23 percent of its value largely on fears over a US stimulus cutback. Gold’s safe-haven appeal is usually burnished by uncertain economy and geopolitical tensions. Prolonged politicking around the US budget had initially prompted hopes that gold prices could rise, but safe-haven bids failed to emerge.
Taking cues from rise in gold prices along with upside in base metals group, silver prices gained around 2.8 percent yesterday. Further, weakness in the DX acted as a positive factor. Silver is trading at 21.725 down by 172 points this morning. Copper gained 1.3 percent in the last trade due to positive economic outlook from Eurozone, which could lead to increased demand for the red metal. Decline in inventories by 0.3 percent to 531,875 tonnes along with weakness in the DX also supported gains. However, weak market sentiments capped sharp gains in the prices. The metal is trading at 3.311 flat this morning. - Fxempire.com

Crude Oil dips in Asia following solid U.S. showing


             Crude Oil futures traded lower during Thursday’s Asian session on some profit-taking following a stellar performance during Wednesday’s U.S. session that saw crude soar on news of a potential drop in supply. Energy company TransCanada revealed that it would not be able to finish its work on a part of the Keystone pipeline this October. 

On the New York Mercantile Exchange, light, sweet crude futures for November delivery fell 0.34% to USD103.75 per barrel in Asian trading Thursday. The November contract settle higher by 2.02% at USD104.10 per barrel on Wednesday. 

The southern leg of the Keystone pipeline might not see completion, as TransCanada has announced. This leg was supposed to connect Oklahoma to the refineries along the Gulf Coast, enabling an increase in oil supply. 

The crude oil inventories release showed an increase of 5.5 million barrels for the week ending September 27. This was higher than the consensus of a 2.3 million increase in the number of barrels, reflecting a downturn in consumption. The total number of crude oil inventories in the US was at 363.7 million barrels that week. 

In US economic news, the government shutdown carried on for its second day in a row as President Obama refused to budge until a good budget deal is struck. 

Meanwhile, US jobs figures reported by the ADP came in weaker than expected, reflecting another downturn in hiring for September. The August figure was revised lower from 176,000 to 159,000 while the September reading came in at 166,000, lower than the 177,000 estimate. 

The U.S. Energy Information Administration said in its weekly report that U.S. crude oil inventories rose by 5.5 million barrels in the week ended Sept. 27, missing market expectations for an increase of 2.3 million barrels. 

Total U.S. crude oil inventories stood at 363.7 million barrels as of last week. The report also showed that total motor gasoline inventories increased by 3.5 million barrels, defying expectations for a decline of 640,000 barrels. 

Elsewhere, Brent crude oil futures for November delivery fell 0.12% to USD108.95 per barrel on the ICE Futures Exchange. - investing.com

Gold dips on profit-taking

  

          Gold prices traded lower during Thursday’s Asian session on what appears to be a bout of clear profit-taking after the yellow metal surged Wednesday as the ongoing US government shutdown forced traders to seek safety in the precious metal. 

Weak US economic data also contributed to the commodity’s rallies, as the selloff in the US dollar led to a gold price increase. The two assets are inversely correlated. 

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery fell 050% to USD1,314.10 per ounce in Asian trading Thursday. The December contract settled higher by 2.69% at USD1,320.70 per ounce on Wednesday. 

Gold futures were likely to find support at USD1,272.10 a troy ounce, the low from Aug. 7, and resistance at USD1,375.10, the high from Sept. 19.

On Capitol Hill, Republicans and Democrats are still butting heads and unable to come up with a budget plan, forcing the US government shutdown to extend to its second day. This caused the US dollar to lose its appeal as a safe-haven investment, pushing traders to flee to more stable assets such as gold. 

In US economic news out Thursday, the ADP employment report showed a weaker than expected reading of 166K, lower than the 177K estimate for September. The August figure suffered a downward revision from 176K to 159K, reflecting a downturn in hiring for the past quarter. 

Weak hiring data and the ongoing US government shutdown led traders to speculate that the Federal Reserve will keep stimulus measures in place for the month and possibly until the end of the year. This contributed to the dollar’s decline as lower returns for the currency are expected, boosting the inversely correlated gold in turn. 

Elsewhere, Comex silver for December delivery dropped 0.79% to USD21.725 per ounce while copper for December deliver fell 0.17% to USD3.309 per ounce. - investing.com