Crude oil slipped from the highest price in three days after an industry report showed U.S. fuel stockpiles increased. The API report released late yesterday showed an unexpected climb in inventory. The contract lost ground after the American Petroleum Institute, in its weekly report on U.S. commercial crude-oil inventories, said supplies were unchanged in the week ended June 21. A survey of analysts had forecast a decline of 2 million barrels.
U.S. crude inventories fell by 28,000 barrels for the week to June 21, data from the American Petroleum Institute showed, much smaller than the forecast drop of 1.7 million barrels based on a Reuter’s poll of analysts. The U.S. Energy Information Administration will release its stockpiles report later on today. The market is still oversupplied, OPEC is still pumping at around 30 million barrels, and demand is flat. So unless we see some change on production we should see prices continue to fall.
WTI crude slipped 41 cents to $94.91 a barrel, and has lost over 2 percent for the quarter so far. U.S. data showing strong gains in orders for durable goods, the largest annual rise in house prices in seven years and rising consumer confidence indicated the economy was starting to pull out of a soft patch. Fed Chairman Ben Bernanke said last week the central bank would likely begin to slow the pace of its bond-buying stimulus later this year. The data supports the decision by the Fed to pare back stimulus. However, the upbeat data from the United States was countered by weak economic signals elsewhere, casting uncertainty on global fuel demand.
Gold fell to the lowest level since Sep 2010 as U.S. economic data beat estimates, backing the case for reduced stimulus from the Fed Reserve as the dollar strengthened. Silver sank to the cheapest since Aug 2010. Gold prices fell Tuesday, relinquishing earlier gains, after data showed consumer confidence in the US hit a five-year high. Gold for August delivery, the most-active contract, was recently down $4.60, or 0.4%, at $1,272.50 a troy ounce on the Comex division of the New York Mercantile Exchange. This morning in the Asian session gold took a hard tumble falling by close to $26 to trade at 1249.15 after traders saw a slew of US economic data print above expectations ranging from home prices, home sales, durable goods, and manufacturing and consumer confidence. It was like a grand slam for the US economy yesterday. Today, traders will be closely watching the unemployment numbers ahead of next Friday’s nonfarm payroll release.
Silver prices are trading at $18.84, down 3.10%. There are no economic releases from the eurozone today. During the US hours, MBA mortgage applications might remain mixed while the GDP growth rate and personal consumption might increase due to the recovery in the economy, which should support the dollar and pressurize silver prices. At the domestic front, silver prices may open on a lower note due to the prevalent weakness in silver prices in the international market.