Crude oil outlook: Oil expected to go down

Industry analysts polled by Bloomberg expect EIA’s report today to show an increase of 1 million barrels in crude oil inventories. We might well be seeing a bearish trend in the price of oil in today’s trading session. API has already reported an increase in the oil inventories in its weekly report on Tuesday. The effects of this were already seen today in the Asian trade where the crude oil had a bearish trend. The dollar had also shown signs of recovery on Tuesday which would also help in reducing oil prices today. At 1122 GMT, crude oil for December delivery was trading 82 cents lower at $81.73/barrel.

USD, on the other hand, was still showing signs of resurgence as the investors now believe that the impact of QE2 will not be as much as it is priced into the USD. Market is still in a confused state and we believe the dollar will be fluctuating in today’s session, but the size of these fluctuations will not be large. At 1129 GMT, USD-EUR exchange rate was $1.3803/Euro.

At 1122 GMT, gold for December delivery was trading at $1,331.90 per troy ounce; $6.70 less than its Tuesday’s closing price. Gold prices have gone down due to the recent rally by the USD. It is still hard to predict which way the gold prices will go today as there is still uncertainty prevailing over the USD in the market.