Oil prices steady in run-up to Christmas - Sean Seshadri

Oil prices moved very little on Tuesday, with liquidity fading in the run-up to the Christmas weekend.

U.S. West Texas Intermediate (WTI) crude oil futures (CLc1) were trading at $52.11 per barrel at 0035 GMT, virtually unchanged from their last settlement.

International Brent crude oil futures (LCOc1) were yet to trade.

Traders and analysts said there were no fundamentals available to drive large price swings, and that markets would likely remain tepid this week.

"With little data due, prices are likely to drift aimlessly in today's session," ANZ bank said on Tuesday.

Jeffrey Halley, senior market analyst at OANDA brokerage in Singapore said that "a light news week and the run in to the holiday season" was keeping markets quiet.

Gold / Silver / Copper futures - weekly outlook: December 19 - 23 - Sean Seshadri

Gold prices bounced off the previous session's 10-month lows on Friday, but the precious metal still posted its sixth straight weekly decline as expectations for higher U.S. interest rates in the months ahead continued to weigh.

Gold for February delivery on the Comex division of the New York Mercantile Exchange tacked on $7.60, or 0.67%, to end the week at $1,137.40 a troy ounce. A day earlier, prices sank to $1,124.30, a level not seen since February 2.

For the week, gold futures lost $24.10, or 2.1%, as the U.S. dollar soared after the Federal Reserve hiked interest rates and signaled it expects to raise rates more quickly than previously anticipated in 2017.

The U.S. central bank predicted it would raise interest rates three times in 2017, up from the two hikes predicted in September.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 102.92 late Friday, not far from Thursday's 14-year high of 103.55.

Both a strong dollar and higher interest rates are typically bearish for gold, which is denominated in dollars and struggles to compete with yield-bearing assets when borrowing costs rise.

Gold prices have slumped since Donald Trump was elected president as rising U.S. bond yields and a rally in stocks markets have damped its appeal.

Also on the Comex, silver futures for March delivery climbed 25.7 cents, or 1.6%, on Friday to settle at $16.21 a troy ounce. The contract fell to a six-month low of $15.92 in the prior session. On the week, silver lost 74.4 cents, or 4.4%.

Elsewhere in metals trading, copper for March delivery slumped 3.6 cents, or 1.4%, on Friday to end at $2.564 a pound after touching a daily low of $2.543, a level not seen since November 30.

In the week ahead, market players will be eyeing the release of Thursday’s final reading on U.S. third quarter gross domestic product for fresh indications on the strength of the economy and further hints on the future path of monetary policy.

Meanwhile, market participants will be awaiting a monetary policy announcement from the Bank of Japan on Tuesday, with most investors expecting the bank to hold its negative interest rates and 10-year government bond yield target steady.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.

Monday, December 19

In the euro zone, the Ifo Institute is to report on German business climate.

Tuesday, December 20

The Reserve Bank of Australia is to publish the minutes of its latest monetary policy meeting, giving investors insight into how officials view the economy and their policy options.

The Bank of Japan is to announce its benchmark interest rate and publish its rate statement, which outlines economic conditions and the factors affecting the monetary policy decision. The announcement is to be followed by a press conference.

Wednesday, December 21

The U.S. is to release data on existing home sales.

Thursday, December 22

The U.S. is to produce data on third quarter economic growth, initial jobless claims, durable goods orders and personal spending.

Friday, December 23

The U.S. is to round up the week with data on new home sales and consumer sentiment.

Oil prices lower as dollar surges after Fed rate hike - Sean Seshadri

Oil prices fell on Thursday, adding to the previous session’s losses on the back of a broadly stronger U.S. dollar after the Federal Reserve raised interest rates for the first time in a year.

U.S. crude was trading at $50.28 a barrel at 10:09 ET, down 0.76 cents or 1.41% from its last close.

Global benchmark Brent futures were at $53.38 a barrel, down 52 cents or 0.96%.

The dollar surged to 14-year highs, after the Fed hiked interest rates by 25 basis points on Wednesday.

The rate hike was largely priced in by markets, but the dollar strengthened after the U.S. central bank predicted it would raise interest rates three times in 2017, up from the two hikes predicted in September.

A stronger dollar is bearish for crude, which is priced in the U.S. currency and becomes more expensive for holders of other currencies.

Oil prices had risen earlier in the day amid hopes that the global market will rebalance in 2017 as a result of planned output cuts by the Organization of the Petroleum Exporting Countries and non-OPEC members.

Producers from outside OPEC agreed last week to cut output by 558,000 bpd from January 1, on top of a cut of 1.2 million bpd cut announced by OPEC on November 30.

The total reduction represents almost 2% of global oil output.

Prices had also received some support from a decline in U.S. crude stockpiles.

Crude oil inventories fell by 2.56 million barrels last week, the U.S. Energy Information Administration reported Wednesday.

That was compared to forecasts for a drawdown of 1.58 million barrels.

Stockpiles of gasoline and distillates also surprised to the downside, with gasoline stockpiles increasing by just 0.49 million barrels and distillates falling by 0.76 million barrels.

Stockpiles at the Cushing, Oklahoma delivery hub for U.S. crude rose by 1.22 million.

Gold price up on market speculation - Sean Seshadri

The price of gold settled at $1161.23, an increase of 0.19%, as investors mulled the outcome of this week's Fed meeting in Washington D.C. The uptick reversed a negative trend for the commodity. The price of silver also increased.

A leading gold analyst said this fall's overall decline is the price of the precious metal is similar to the scenario that played out last year. Back then, gold fell 18%, and then surged 24%.

The significant price decline happed before the Fed meeting where interest rates were increased last year, and then the price recovered and gained ground after that.

Analysts said the commodity will, based on this historic pattern, likely rally during the next five months. The increase could be by as much as 16%.

The rise in prices will continue until the Chinese New Year, which coincides with the commercial peak of production for gold. China is now the world's leading consumer of gold, the world's fourth most liquid asset.

Inflation will also be a factor for gold. Analysts believe markets are "underestimating inflation" by 30 to 50 basis points. Thus, the mathematical probability of a rally is extremely high, as the consensus is that inflation is going to be higher next year, analysts said.

WTI oil futures struggle to hold $50 after crude inventory data - Sean Seshadri

In a knee-jerk reaction, West Texas Intermediate oil futures pared losses in North American trade on Wednesday, after data showed that oil supplies in the U.S. registered an inventory draw that was twice as big as expected.

However, investors appeared to change their minds as they digested the data and crude prices hit intraday lows in what may have disappointment at the large build at the key U.S. delivery point as well as larger-than-expected increases in both gasoline and distillate stockpiles.

Crude oil for January delivery on the New York Mercantile Exchange fell 93 cents, or 1.83%, to trade at $50.00 a barrel by 10:49AM ET (15:49GMT) compared to $50.37 ahead of the report. West Texas Intermediate oil hit an intraday low of $49.84 after the release.

The U.S. Energy Information Administration said in its weekly report that crude oil inventories fell by 2.389 million barrels in the week ended December 2. Market analysts' expected a crude-stock draw of 1.032 million barrels, while the American Petroleum Institute late Tuesday reported a supply draw of 2.21 million barrels.

Supplies at Cushing, Oklahoma, the key delivery point for Nymex crude, rose by 3.783 million barrels last week, the EIA said. Total U.S. crude oil inventories stood at 485.8 million barrels as of last week, according to press release, which the EIA considered to be “at (the) upper limit of the average range for this time of year”.

The report also showed that gasoline inventories increased by 3.425 million barrels, compared to expectations for a build of 1.948 million barrels, while distillate stockpiles grew by 2.501 million barrels, compared to forecasts for a gain of 1.840 million.

Elsewhere, on the ICE Futures Exchange in London, Brent oil for February delivery lost 76 cents, or 1.41%, to $53.17 by 10:50AM ET (15:50GMT), compared to $53.55 before the release.

Investors are turning their attention towards a meeting of OPEC and non-OPEC members in Vienna on December 10 to finalize the details of the agreement to cut production in order to help relieve the global supply glut and support prices.

Though OPEC members have reached an agreement to cut daily output by 1.2 million barrels and non-OPEC producers pledged another 600,000 barrel reduction, doubts have emerged over how effective the cuts will be at reducing massive oversupply that has pressured prices lower for more than two years.

Oil production has been outstripping consumption by between one to two million bpd since late 2014.

Furthermore, OPEC and Russia have reported that output hit record highs since the deal was announced, adding to fears that the global supply overhang could persist well into 2017.

Meanwhile, Brent's premium to the WTI crude contract stood at $3.17 a barrel by 10:51AM ET (15:51GMT), compared to a gap of $3.00 by close of trade on Tuesday.

NYMEX oil falls in Asia as API crude drop shrugged off - Sean Seshadri

Crude prices fell in Asia on Wednesday despite a draw in U.S. stocks in American Petroleum Institute (API) figures that also showed solid builds in gasoline and distillate inventories.

On the New York Mercantile Exchange, West Texas Intermediate crude for January delivery fell 0.45% to 50.70 a barrel.

The API data will be followed Wednesday by more closely-watched official figures from the U.S. Department of Energy.

Overnight, crude ended a four-day winning streak on views that Organization of Petroleum Exporting Countries would fail to adhere to an agreement to curb output.

"With both Russia and OPEC producing at record amounts, the market is scratching its head about how both blocs will manage to comply with the Vienna production cut targets," said Jeffrey Halley, senior market analyst at OANDA, in a note on Wednesday.

On London's Intercontinental Exchange, Brent crude for February delivery was last quoted at $53.56 a barrel.

As well, domestic oil production and inventory in the U.S. is also making news with the Jack Gerard of the American Petroleum Institute lobbying president-elect Donald Trump this week to "restore the rule of law" in America's regulatory regime and make the approval of the Dakota Access Pipeline a top priority when he takes office.

“Modernizing our nation’s energy infrastructure benefits American consumers by keeping energy affordable, creating well-paying American jobs, and improving our environment,” said Gerard, based in Washington D.C.

“Moving forward, I am hopeful President-elect Trump will reject the Obama administration’s shameful actions to deny this vital energy project, restore the rule of law in the regulatory process, and make this project’s approval a top priority," Gerard concluded. “I am troubled, though not surprised, that the Obama administration is again putting politics over sound public policy and ignoring the rule of law."

Oil prices settle down on Monday - Sean Seshadri

Oil prices reached a new, one-year high by mid-day on Monday, as last week’s rally from the Organization of Petroleum Exporting Countries (OPEC) agreement to cut production continued apace U.S. crude for January delivery this morning gained 20 cents, or 0.4%, to $51.88 a barrel on the New York Mercantile Exchange (NYMEX). The price had been as high as $52.42 a barrel for Crude Oil, the best intraday price since July 2015. Brent Oil, the global oil price benchmark, gained 44 cents, or 0.8%, to $54.90 a barrel on ICE Futures Europe market.

But oil prices settled down for the day. Crude oil settled at 51.08, down 1.24%. Brent oil was down for the day, 54.24%, 0.40%.

The market contineus to gain as some investors anticipate that OPE is more likely to keep this pledge than in past pacts. OPE members are famed for surpassing production plans. Huge inventories of oil today are most likely, analysts said, to encourage the oilmen to keep their promises.

“They only must be on their best behavior for a few months to get the market into a daily supply deficit,” Phil Flynn, senior market analyst at the Price Futures Group in Chicago, said in a note to investors.

Gold / Silver / Copper futures - weekly outlook: December 5 - 9 - Sean Seshadri

Gold prices rose on Friday, moving higher for the first time in four sessions despite a solid U.S. jobs report as the dollar slid, helping support demand for the precious metal.

Gold for February delivery settled up 0.82% at $1,179.00 on the Comex division of the New York Mercantile Exchange.

Prices hit lows of $1,160.00 a troy ounce on Thursday, their weakest level since February.

The Labor Department reported Friday that the U.S. economy added 178,000 jobs in November from the prior month, while the unemployment rate dropped to 4.6%, its lowest level in nine years.

Economists had forecast nonfarm payrolls rising by 175,000 last month and the unemployment rate remaining unchanged at 4.9%.

However, the report also showed that average hourly earnings fell 0.1% from October, while the annual rate of wage growth slowed to 2.5% from 2.8% in October.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.27% to 100.75 late Friday, helping support gold prices.

The jobs report underlined the Fed’s case for a rate hikes at its upcoming meeting on December 13-14, but the weak wage data clouded the outlook for further rate hikes in 2017.

Investors are currently pricing in a 100% chance of a rate hike this month, according to federal funds futures tracked Investing.com's Fed Rate Monitor Tool.

Investors see a 93.9% chance of a follow up rate increase in February.

Expectations of tighter monetary policy tend to weigh on gold, which struggles to compete with yield-bearing assets when borrowing costs rise.

Elsewhere in metals trading, silver for March delivery was up 1.74% at $16.79 a troy ounce, while copper for March delivery settled at $2.63 a pound.

In the week ahead, markets will be paying close attention to speeches by Fed officials and U.S. data on non-manufacturing activity and consumer confidence going into the holiday period.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.

Monday, December 5

The U.K. is to release data on service sector activity.

The Institute for Supply Management is to release its non-manufacturing PMI.

New York Fed President William Dudley is to speak about the macroeconomic outlook in New York.

St. Louis Fed head James Bullard is to speak at an event in Arizona.

Tuesday, December 6

The Reserve Bank of Australia is to announce its benchmark interest rate and publish a policy statement which outlines economic conditions and the factors affecting the monetary policy decision.

In the euro zone, Germany is to report on factory orders.

Canada is to produce a report on the trade balance.

The U.S. is also to release trade data, along with reports on nonfarm productivity and factory orders.

Wednesday, December 7

Australia is to release data on third quarter economic growth.

The U.K. is to release industry data on house price inflation, as well as official figures on manufacturing and industrial production.

The Bank of Canada is to announce its benchmark interest rate and release its latest policy statement.

Thursday, December 8

Both China and Australia are to release trade data.

The European Central Bank is to announce its latest monetary policy decision. The announcement is to be followed by a press conference with President Mario Draghi.

Canada is to produce reports building permits and new house price inflation.

The U.S. is to release the weekly report on jobless claims.

Friday, December 9

China is to release data on consumer and producer price inflation.

The U.S. is to round up the week with a preliminary reading on consumer sentiment for December from the University of Michigan.

Gold settles down 0.4% - Sean Seshadri

 Gold prices fell Thursday, as very strong U.S. economic data made the case that the Federal Reserve will take a more aggressive approach on monetary policy this month. The Fed has been loathe to raise interest rates, during the Obama administration, because of tepid economic performance during the "recovery" from the Great Recession of 2007. U.S. Jobs and housing reports were positive when released on Wednesday.

Gold futures for February 2017 closed down about 0.4% at $1169.40 per troy ounce on the Comex division of the New York Mercantile Exchange. The prices hit $1,162.20 a troy ounce earlier in the session.

Analysts noticed that this was weakest performance for gold since February.

Market anticipation of so-called "tighter" monetary policy weighs heavily on gold, which competes with yield-bearing bonds and other instruments whenever borrowing costs rise.

Gold heads into Asian day quoted weaker with OPEC curb effort in focus - Sean Seshadri

Gold prices were quoted lower ahead of early Asian trade on Wednesday with investors on the watch for news on prospects for an OPEC effort to curb output in a move that has implications for global growth and inflation outcomes.

Gold futures on the Comex division of the New York Mercantile Exchange were last quoted at $1,186.50 a troy ounce, down 0.36%.

Elsewhere in metals trading, silver futures were last quoted at $16.672 a troy ounce, down 0.02%, while copper futures last traded at $2.604 a pound, down 2.49%. Copper prices had climbed around 18% this month on hopes that infrastructure plans in top consumers China and the U.S. will bolster demand for the industrial metal.

Overnight, gold prices were lower Tuesday as upbeat U.S. economic reports underlined the view that the Federal Reserve will hike interest rates in December, underpinning dollar demand.

Data on Tuesday showed that the U.S. economy grew at a quicker than expected rate in the third quarter, expanding at the fastest pace in two years.

The Commerce Department reported that gross domestic product grew by 3.2% on a year-over-year basis, up from the previously reported estimate of 2.9%.

Another report showed that U.S. consumer confidence rebounded strongly in November, after a moderate decline in October.

Gold is priced in dollars and becomes less attractive to holders of other currencies when the dollar rises and is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar in which it is priced.

Prices of the yellow metal have fallen more than 6% so far this month on expectations that increased U.S. fiscal spending under a Trump administration will spur economic growth and inflation, which would ultimately lead to an era of higher interest rates.

Traders were also keeping an eye on oil prices as they assessed the likelihood that OPEC members would reach a deal on output cuts ahead of Wednesday’s key meeting.

A production cut would prop up oil prices and bolster the currencies of oil exporting countries such as Canada and Russia.

Oil prices jump on fresh hopes for OPEC deal - Sean Seshadri

Oil prices jumped in choppy trade on Monday after Iraq’s oil minister said he was “optimistic” that Wednesday’s crunch OPEC meeting will yield an agreement on output cuts.

U.S. crude oil was up 78 cents or 1.78% at $46.88 a barrel at 0931ET, after falling as low as $45.16 earlier.

Global benchmark Brent futures were at $49.08 a barrel, up 81 cents or 1.68%.

Prices jumped after Iraqi oil minister Jabar Ali al-Luaibi said Monday he is “optimistic” that OPEC will reach an agreement that is acceptable to all this week.

The Organization of the Petroleum Exporting Countries is attempting to get its 14 member states, along with non-OPEC member Russia, to implement coordinated production cuts aimed at reducing a global supply glut that has seen oil prices halve in two years.

In September the producer cartel reached an agreement that would reduce production to between 32.5 million and 33 million barrels per day.

OPEC is to hold a meeting in Vienna on Wednesday, where the deal was expected to be finalized.

But reaching an agreement on a deal to cut output has proved problematic, with some producers reluctant to curb production.

Over the weekend Saudi Arabia’s oil minister Khalid al-Falih said oil prices will stabilize in 2017 without an intervention from OPEC.

The remarks raised fresh doubts over whether an agreement on OPEC’s first production cut in eight years would be reached.

Meanwhile, oil ministers from Algeria and Venezuela were to travel to Moscow on Monday and Tuesday, ahead of Wednesday’s key meeting, in a bid to persuade Russia to take part in cuts rather than merely freezing output.

Most analysts believe that some form of consensus will be reached, but doubts remain over whether it will be enough to support the market.

"An agreement to a large production cut could send oil prices closer to $60 per barrel before year's end, while failure to reach an agreement could cause oil prices to fall back to the low $40 per barrel," analysts at Nordea said.

NYMEX crude drops smartly in Asia as OPEC output curb efforts eyed - Sean Seshadri

Crude oil prices dropped smartly in Asia on Monday as investors braced for a down-to-the-wire decision by OPEC to curb output as proposed.

U.S. crude oil prices slumped 1.44% to $45.33 a barrel on the New York Mercantile Exchange.

Last week, oil prices fell sharply on Friday amid uncertainty over whether the Organization of the Petroleum Exporting Countries can reach an agreement to cut production and prop up markets.

Global benchmark Brent futures were last quoted at $47.43 a barrel.

Doubts over whether major global exporters will be able to reach an agreement on November 30 to rein in output also kept investors on the sidelines. OPEC is to hold a meeting in Vienna on Wednesday aimed at finalizing the details of a proposed output cut, which it is hoped will reduce a global supply glut that has pressured oil prices lower for more than two years.

The producer cartel is attempting to get its 14 member states, along with non-OPEC member Russia, to implement coordinated production cuts.

Reaching an agreement on a deal to cut output has proved problematic, with some producers, most notably Iran, reluctant to curb production.

Most analysts believe that some form of consensus will be reached, but doubts remain over whether it will be enough to support the market.

"An agreement to a large production cut could send oil prices closer to $60 per barrel before year's end, while failure to reach an agreement could cause oil prices to fall back to the low $40 per barrel," analysts at Nordea said.

Gold eases off 9-1/2 month lows as dollar rally pauses - Sean Seshadi

Gold prices eased on Thursday after falling to their lowest levels since February as the dollar paused after surging to fresh 14-year peaks.

Gold for December delivery was trading at $1,187.55 a troy ounce by 0946 GMT, after earlier falling as low as $1,179.75, a level not seen since February 8.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last at 101.67, not far from highs of 102.11, the strongest level since early April 2003.

The dollar rallied after upbeat U.S. data and Wednesday’s Federal Reserve minutes cemented expectations for a rate hike next month.

The minutes from the Fed’s November meeting said an interest-rate increase was possible “relatively soon” if data indicated that the economy is improving.

Some Fed officials explicitly called for a rate hike in December, the minutes showed.

Separately, data showed that U.S. durable goods orders rose at the fastest rate in a year in October and another report showed that a gauge of U.S. consumer confidence rose strongly in November.

According to Investing.com's Fed Rate Monitor Tool, odds for a rate hike at the Fed's December 13-14 meeting are now at 100%.

Gold is priced in dollars and becomes more expensive to holders of other currencies when the dollar strengthens.

Prices of the yellow metal had already come under pressure this month amid the view that increased U.S. fiscal spending under a Trump administration will spur economic growth and inflation, which would ultimately lead to an era of higher interest rates.

Gold is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar in which it is priced.

Trade was expected remain quiet on Thursday; with U.S. markets closed for the Thanksgiving Day holiday.

Elsewhere in metals trading, silver futures for December delivery were at $16.34 a troy ounce, while copper futures traded at $2.65 a pound.

Copper prices have risen around 20% so far this month on expectations of rising demand from China and an increase in infrastructure spending in the U.S. when Donald Trump becomes president.

China and the U.S. are the top two consumers of the industrial metal.

Oil prices fall on strong dollar, trading thin ahead of OPEC meeting - Sean Seshadri

Oil prices fell on Friday, under pressure from a strong dollar, but activity was low after the U.S. Thanksgiving holiday and with many traders reluctant to take big new positions ahead of a planned OPEC-led crude output cut to be decided next week.

International Brent crude oil futures were trading at $48.57 at 0435 GMT, down 43 cents, or 0.9 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures were at $47.59 per barrel, down 37 cents, or 0.8 percent, from their last settlement.

Traders said the main drag on prices on Friday was the strong dollar, which this month hit levels last seen in 2003 against a basket of other leading currencies.

A strong dollar, in which oil is traded, makes fuel purchases more expensive for countries using other currencies at home, potentially crimping demand.

Traders said market activity was low due to the U.S. holiday, while there was a reluctance to take on big price directional bets because of uncertainty about the planned oil output cut, led by the Organization of the Petroleum Exporting Countries (OPEC).

OPEC is due to meet on Nov. 30 to coordinate a cut, potentially with non-OPEC member Russia, but there is disagreement within the producer cartel as to which member states should cut and by how much.

"Crude oil prices treaded water as OPEC and non-OPEC members spent more time in preliminary meetings ahead of the Vienna gathering ... Investors look like they are sitting on the sidelines as they await the OPEC meeting in Vienna next week," ANZ bank said on Friday.

Most analysts believe that some form of a production cut will be agreed, though it is uncertain whether this will be enough to prop up a market that has been dogged by a fuel supply overhang for over two years.