On Friday, Brent crude paired some previous losses and the front-month contract (ICE) gained about 1 percent. Today in early trading, the oil price falls back below 109 USD per barrel (USD/bbl) as refineries along the US East Coast cut down the production due to Hurricane Sandy which is expected to reach the coast early on Tuesday.
Regarding the possible impact of the Hurricane, operations of about 7 % of the US refining capacity might be influenced by flooding and storms and some refineries have thus already been scaling (or shutting) down the production which might result in built in crude oil inventories and thus weigh further on the price of oil. Meanwhile, gasoline and diesel spot prices rose on Friday in anticipation of lower refinery output.
Precious Metals
Precious metals experienced a calm session on Friday and the price of gold closed barely changed at 1711 USD per troy ounce (USD/toz). Still, the price of the yellow metal fell in the third consecutive week.
Regarding the latest CFTC Commitment of Traders report, it showed a significant cut in speculative positions in gold futures; money managers’ net position fell to the lowest level since mid September.