Commodities: Crude-oil futures firmly lower as US inventories unexpectedly surge
By Andrew Schonberg
Date: Wednesday 08 Mar 2017
(ShareCast News) - Crude-oil futures are firmly on the back foot thanks to an industry report revealing a surge in US inventories last week, renewing concerns over the black liquid's global supply glut.
At about 15:17 GMT, Nymex-priced West Texas Intermediate crude was down 1.34% to $52.43 a barrel, and Intercontinental Exchange-traded Brent was down 1.13% to $55.29 a barrel.
US crude stores rose by 11.6m barrels last week, according to American Petroleum Institute data. This was more than expected. The US Energy Administration's report on US inventories is due out today.
"Despite climbing to challenge 2-week falling highs resistance on Tuesday, Crude Oil prices have since fallen back sharply as US industry inventories data showed a build 10 times larger than expected," said Mike van Dulken and Henry Croft of Accendo Markets.
"Investors will now be looking for this afternoon's official US Government Inventories to confirm or dispel the industry data," the pair opined in a statement.
The market is in the midst of a long-running supply glut, with prices having overall been on the up in recent months on the back of promised supply curbs by Opec.
SwissQuote commented, again, that crude was contained within a sideways range and has been unable to mount a serious challenge to $55.24 resistance.
"We rule out for the moment any correction towards $49.61. Expected to see deeper buying pressures," said SwissQuote.
Meantime, on Comex, gold was down 0.57% to $1209.2 an ounce, with silver down 1.09% to $17.35 an ounce and copper up 0.27% to 262.55 cents a pound.
"Gold has taken another leg lower as the safe haven's downtrend continues ahead of next week's expected Fed rate hike," said analysts van Dulken and Croft.
"Having broken through $1219, the next major level of support for the precious metal lies marginally above $1180, a price not seen since late January."
The pair cautioned that should the US dollar breakout from 1-week falling highs resistance, the downtrend could accelerate as the price of holding gold increases for investors.
This afternoon, the dollar-spot index was higher, while sterling was mildly lower against the greenback, which has enjoyed an uptick on US rate-hike expectations for March.
Three-month industrial metals on London Metals Exchange were all lower. Zinc and copper led, and were chased by tin and aluminum.
That was despite data released overnight that showed a trade deficit in industrial-metals-hungry China during the month of February, a rare occurrence.
China's trade with rest of the world registered a shortfall of $8.79bn in February, its first since 2014, as imports surged - reflecting a strong domestic Chinese economy .
Among agriculturals, Chicago Board of Trade-priced corn was down 0.4% to 374.5 cents a bushel, with wheat down 0.82% to 452.75 cents a bushel.
On ICE, cocoa was down 0.63% to $1905 a MT, with cotton No.2 up 0.05% to $78.07 cents a pound. Live cattle rose 1.37% to 116.93 cents a pound.
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