On Friday, Brent (ICE) crude edged lower and the front-month contract closed below 114 USD per barrel (USD/bbl) level. Today in early trading, however, Brent erases previous losses and at the time of writing is seen just shy of 115 USD/bbl.
The price of oil is supported by bets on further round of quantitative easing as well as by news that tropical storm Isaac is approaching US gulf coast and therefore poses a threat to oil and gas facilities. According to Reuters, the storm might spur short-term closures of about 85 percent of oil facilities.
Meanwhile, Petroleum Economics said on Friday that the International Energy Agency might release oil from strategic reserves as early as in September. Maria van der Hoeven, the agency’s chief, however said that the conditions for the release were not present. Nevertheless, she added that the agency remained ready to act if such conditions occurred.
The CFTC Commitment of Traders report released on Friday saw a sharp increase in money managers’ net positions in gold which soared by about one half. Moreover, according to data compiled by Reuters, holdings of gold by major ETFs hit a new all-time high in August. Recall that the price of the yellow metal is seen at the highest level since mid April.