On Wednesday, the price of oil extended Tuesday’s losses and the front-month contract on Brent
settled below 109 USD
per barrel (USD/bbl) level. The price of crude
fell although the US Energy Information Administration (EIA) said that US crude
inventories fell more than expected last week. The overall message of the report was, however, rather bearish, because a large built in gasoline and distillates stocks.
Let us recall that despite the fall, overall US crude
inventories are still seen well above medium term average, whereas products stocks have been below the average. According to the report, the increase in products stocks was due to both increase of production (PADD 1, i.e. East Coast, refinery utilization rose by about 12 percentage points as refineries returned to operation after Sandy) and lower demand. Higher refinery runs (in Europe, higher utilization rate is also expected to rise due to the return of refineries from the maintenance season) might limit the prospective pressure on distillates prices in Europe in weeks ahead.
The price of gold
fell below resistance at 1700 USD
per troy ounce (USD/toz) yesterday and thus hit a one-month low. Despite recent fall in the price of gold
holdings of the metal are up by about 3 percent from the end of the previous quarter.