Crude Oil Insights Crude Price Outlook, Uncategorized Crude oil update: Oil and gold up on the back of weak dollar and strong US data

Crude oil update: Oil and gold up on the back of weak dollar and strong US data

Light sweet crude oil for December delivery went up by 24 cents, or 0.3%, to settle at $82.18/barrel receiving lifts from a weak USD and a decrease in the US weekly jobless claims data. It traded between $81.50 to $82.64/barrel while the trading volume on Thursday was the lowest for this year as the investors were cautious to open new positions ahead of Friday’s release of quarterly US GDP data. The figures will be released at 1230GMT on Friday. US weekly jobless claims showed a decrease of 21000 in claims which helped oil sustain its bullish trend during the day.

USD continued its fluctuations and on Thursday it was seen to be declining. As we have mentioned in our earlier posts that we expect to see fluctuations in dollar this week as the market is uncertain over what will be the size and scope of QE2. FOMC’s next week meeting will help eliminate this uncertainty. The decline in the USD helped oil prices end on a high on Thursday as a weak USD makes commodities priced in dollar cheaper to buy using other currencies. ICE dollar index fell from 78.149 to 77.293 on Thursday.

Weak USD along with the unexpected decrease in the US jobless claims data help rally gold prices up on Thursday. Gold for December delivery settled $19.90 higher at $1,342.50 per troy ounce. The uncertainty in the market over QE2 can also be witnessed in the prices of gold as they also fluctuate on a daily basis. The prospect of a potential spark of inflation motivated investors to turn to gold on Thursday.

At 0420GMT, crude oil for December delivery was trading at $81.73/barrel, while gold for December delivery was trading at $1,341.20 per troy ounce and USD-EUR exchange rate was $1.3899/Euro (at 0434GMT).

 

Author: Irfan