Oil prices rallied after OPEC’s secretary general Abdalla el-Badri reportedly said he expects oil prices to recover later this year. WTI for October delivery gained $1.96 to $94.88 yesterday on the New York Mercantile Exchange, the highest close since Sept. 3. The volume of all futures traded was about 55 percent above the 100-day average. Prices have decreased 3.8 percent this year. Responding to falling demand, Saudi Arabia cut its crude supply by 408,000 barrels a day in August, the biggest reduction since 2012, a submission made by the country to OPEC shows. OPEC officials, including Saudi Arabian Oil Minister Ali Al-Naimi, previously said “they see no urgent need to respond to oil’s decline.” Reflecting slow recovery in global demand, as indicated by the International Energy Agency monthly report, OPEC predicts in a September 10 report that demand for OPEC’s oil will drop to 29.2 million barrels a day in 2015 from 29.5 million this year.
After falling to $1,225.67 an ounce on September 15, gold for immediate delivery rose to $1,235.55 yesterday in Singapore. Gold for December delivery traded at $1,238 an ounce on the Comex in New York from $1,236.70 yesterday. Holdings in the SPDR Gold Trust, the biggest bullion-backed exchange-traded product, contracted yesterday to 784.22 metric tons, the least since June. Investors are watching anxiously to see what the Fed decides on timing of interest rate hike as improving outlook for US economy warrants shifting to more hawkish stance sooner than anticipated, adding pressure to precious metals.
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