Crude oil insights: Oil prices increase slightly on US data

We predicted yesterday in our post that we might be seeing a recovery from the USD on Tuesday which will help in easing oil and gold prices. There were some signs of recovery from the USD as the USD-EUR exchange rate remained well below the $1.40/Euro barrier and later in the day it was trading nearly at $1.39/Euro. Crude oil for December delivery closed at $82.55/barrel on Tuesday, 3 cents above Monday’s closing price. The recovery of the USD should have decreased the oil prices but the main reason for increase in oil price had been the increase in the US consumer confidence index this month which stood at 50.2, up from 48.6 in September. This improved market sentiment helped the oil prices to increase. However, the market still remained cautious ahead of the weekly oil inventories report which might be showing an increase in oil inventories.

As a result of this ‘little’ recovery by the dollar, gold price went down slightly. Gold for December delivery lost 30 cents to close at $1,338.60 per troy ounce. We believe the market will continue this uncertain behavior until the next FOMC meeting on Nov. 2 which will help in determining where the USD will end up.

At 0336 GMT, oil for December delivery was trading at $82.09/barrel, gold for December delivery was trading at $1,334.70 per troy ounce at 0330 GMT while USD-EUR exchange rate at 0342 GMT was $1.3813/Euro.