Crude oil review: Week in review

Crude oil prices last week saw considerable fluctuations, mostly because of the uncertainty over the size of QE2 which overshadowed the market the whole week. Such was the volatility in the price of crude oil that the week saw price of crude oil for December delivery above $83/barrel and below $81/barrel as well. At 0323GMT, it was trading at $81.83/barrel in the Globex e-trading session.

The week started off with a weak dollar, helping oil prices to remain bullish, mainly because G20 finance ministers’ meeting, over the weekend, finished without any consensus over currency crisis. Oil continued its bullish trend on Tuesday because of increase in US consumer confidence index for October, even when the USD showed signs of some recovery. Oil prices came down on Wednesday, when the USD continued it’s strengthening and reports showed more than expected increases in oil inventories. USD weakened again on Thursday while the US Department of Labor’s weekly jobless claims data showed a decrease in US jobless claims. Both of these factors put oil prices on the bullish track on Thursday. Oil finished off the week on a low at $81.43/barrel mainly due to below expected increase in the US quarterly GDP growth figures that were released by the US Commerce Department on Friday which tempted the investors to sell the positions they had taken earlier in the week.

Gold, on the other hand, was no different as well. Fluctuations in the USD had their strong say on the gold prices, which were also seen to be volatile during the week. Gold for December delivery traded as high as over $1,355 per troy ounce and as low as $1,320 per troy ounce. Weak USD helped gold rally at the start of the week and continue it until Tuesday. Recovery by the USD on Wednesday forced gold prices to come down when the December contract traded at its lowest at one point during the day. It wasn’t long before gold started its rally again on the back of weak USD and strong US jobless claims data on Thursday and on less than expected increase in the quarterly US GDP growth figures on Friday. At 0437GMT, gold for December delivery was trading at $1,360.40 per troy ounce, up $2.80.