Brent touched 116 USD per barrel (USD/bbl) level on Thursday and thus hit a new three-week high due to the worries about further worsening of the situation in the Middle East and lingering production problems at North Sea oilfields.
Today, the International Energy Agency (IEA) released its October’s Oil Market Report. The IEA said that industrial oil stocks fell counter-seasonally in August due to the negative impact of Hurricane Isaac on the US Gulf Coast. The agency also cut its forecast for this year’s growth of oil demand and predicted that the expected sluggish growth of the global economy and vital supply growth could put a moderate downward pressure on oil prices in years ahead.
Regarding the short-term outlook, we do not believe that the fundamental situation in the oil market justifies recent surge in prices and we therefore expect price to fall back to about 105 USD/bbl level in weeks ahead.
Gold price edged higher on Thursday, supported by the weakening US dollar. Despite the gains, the yellow metal is set to post the largest weekly loss since early August.
Although the demand might pick-up in the rest of the year in Asia (due to seasonal factors), for the time being remains muted. Reuters quoted an Asian dealer who said that the higher activity in the physical market might occur if the price fell below 1760 USD per troy ounce (USD/toz) level.