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The Commodities Report

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Gold near to 1100$/oz

Thu, Nov 5 2009, 11:08 GMT
by KBC Market Research Desk

KBC Bank

Headlines

• Lower U.S. inventories send crude price towards 80$/b level 

• Gold near to 1100$/oz 

• Weak dollar and signs of economic revival increase base metals higher across the board

  
  

Brent and Distillates

Crude oil prices rose after the latest U.S. inventories data showed that crude stocks fell 4 mln.b. due to lower imports last week, confounding the consensus market forecast for an increase of 1.4 mln.b. Also petrol inventories fell 300 kb, contrary to the consensus forecast for a rise of the same amount. Only distillate inventories (including heating oil) fell 400 kb, below the consensus forecast for a drop of 1mln.b. Moreover, the weakening dollar added to price increase.
Today, oil has fell slightly, after a steep decline in U.S. crude inventories sent prices up the previous day, as traders look to the fall in equity markets to take profits despite the weak dollar.

U.S. Federal Trade Commission rule took effect on Wednesday that would hit energy traders and companies with fines of up to 1 mln.$/d if they manipulate the oil markets. The FTC unveiled the rule back in August to go after fraud in oil markets that it said could cause widespread damage to the U.S. economy. The old fine was just 11,000 $.

The International Energy Agency will "substantially" downgrade its long-term oil demand forecast in its annual energy outlook next week, the second cut in a row, the Wall Street Journal reported on Wednesday. Efforts to better manage expanding oil demand in the developed world have been more effective than first expected, the paper quoted a person familiar with the report.

Japan's commercial gasoline inventories rose to a three-month high last week, while kerosene stocks fell to near a two-month low, industry data showed today. Gasoline stocks increased by 2.2 %, i.e. 280 kb from the week before, the Petroleum Association of Japan (PAJ) said.

Russian state oil company Zarubezhneft signed contracts with Cuba to search for oil along Cuba's northern coast and said it was looking at procuring more areas for exploration in a step forward for the island's oil hopes.

Output of biodiesel in Italy, Europe's third-biggest producer, will be flat this year on 2008's 660 kt, with rising inflows of cheaper imports curbing domestic output growth, a top industry official said. Italy's biodiesel output was expected to rise in 2009 on the back of a hike in a mandatory target for its use in the total car fuel blend to 3 from 2 % last year

• Download Full The Commodities Report

Published on  Thu, Nov 5 2009, 11:18 GMT