On Thursday, oil extended previous losses. The price of the front-month contract on Brent (ICE) settled at 113.53 USD per barrel (USD/bbl) and in intraday trading hit three-week low. The losses were primarily driven by a flow of worse than expected economic figures from both sides of the Atlantic – in the morning, French flash PMI for February fell short of expectations while in the afternoon US Philly Fed index shrunk unexpectedly. The oil price bottomed out after the release of report on US stocks of crude and products which showed higher than expected draw of both gasoline and distillates inventories. Regarding physical oil trading, the situation in the North Sea remains calm despite some problems with production at the key Buzzard field which led to deferrals of some cargoes.
Today in early trading, the oil price was supported by better than expected Ifo reading and currently is trading at 114.30 USD/bbl.
Gold recorded large losses on Wednesday after the release of Minutes from the latest FOMC meeting which unveiled that several governors were concerned that the current easy-money policies could lead to excessive risk-taking and instability in financial markets. Although the news had almost no impact on long-term market interest rates, it triggered a relatively sharp sell-off of the yellow metal and its price hit a seven-month low.
Yesterday, gold took some losses back and gained about 0.9 %. Still, gold is set to post relatively high losses in the second consecutive week.
Chart of the day:
Brent is set to post the largest weekly losses since early December last year.