Wednesday, 17 September 2008 22:13:04 GMT
Written by David Rodriguez, Quantitative Analyst
The NYMEX WTI Crude Oil contract moved sharply higher to end the day’s trade, as a dramatic decline in the US dollar combined with a larger-than-expected crude inventories drawdown to send futures up nearly 6 percent through the close.
Commodities - Energy · Crude Oil Tumbles Further on Global Financial Market Distress
· Brent Crude Prices follow WTI Lower Oil Traders Continue Selling Crude on US FOMC Decision, Market Distress Crude Oil (WTI) $96.40 +$5.30 +5.81%
The NYMEX WTI Crude Oil contract moved sharply higher to end the day’s trade, as a dramatic decline in the US dollar combined with a larger-than-expected crude inventories drawdown to send futures up nearly 6 percent through the close. American Petroleum Institute officials reported that crude oil inventories fell more than expected in the week ending September 12, as a fairly pronounced drop in domestic production led petroleum companies to draw on existing inventories. Such numbers are ostensibly bullish for crude prices, but it is likewise important to note that demand for gasoline saw a marked decline through the same period. If we see continued declines in demand for petroleum products, we could easily see Crude Oil continue on its recent downtrend.
Brent Crude $94.08 +$4.86 +5.45%
Brent crude futures followed their US counterparts, and we see little reason for divergence between WTI and Brent futures through the foreseeable future. The European contract will likely continue its decline if we see further US dollar rallies through the near term. See
forex trading news for more.
Upcoming Department of Energy Inventories
Country Day Release Expected
US Sep 24 US Crude Inventories (SEP 19) ----
US Sep 24 US Gasoline Inventories (SEP 19) ----
US Sep 24 US Distillate Inventory (SEP 19) ----
Commodities - Metals · Gold Prices Tumble on Dollar Strength
· Silver Outlook Tied to Dollar, Gold Prices Gold and Silver Could Gain if US Dollar Pulls Back Gold $869.30 +88.80 +11.40%
Gold prices rallied strongly through the day’s close, as clear financial market distress sent investors stampeding into the traditional safe-haven commodity. Indeed, short-term
Treasury Bill rates hit their lowest in over 50 years on news of further Federal bailouts for financial shares. Such perilous financial market conditions continue to support gold rallies, and we may yet see further strength through near-term COMEX trading. See our
technical outlook for Gold for more.
Silver $12.065 +$1.548 +14.72%Silver unsurprisingly traded lockstep with gold prices, and the COMEX contract likewise looks to bounce further off of near-term support. Continued equity market volatility and our forecasts for US dollar declines could produce a short-term retrace of previous Silver weakness.
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