Crude Oil keeps climbing after Fed passes on tapering

                  Crude Oil futures continued higher during Thursday’s Asian session after the Federal Reserve shocked markets by saying it will not taper its quantitative easing program. 

On the New York Mercantile Exchange, light, sweet crude futures for November delivery jumped 0.41% to USD107.72 per barrel in Asian trading Thursday. The November contract settled higher by 2.35% at USD107.28 per barrel on Wednesday. 

Many investors felt the Fed would announce plans to trim the amount of bonds it buys each month to spur recovery, a stimulus tool known as quantitative easing that drives down long-term interest rates and weakens the dollar to spur recovery, a recipe for rising gold prices. However, the Fed surprised markets by saying tapering of its easing efforts is tied to economic data and not the calendar. 

While that could be viewed as a sign that the U.S. economy is not as deep into recovery as the Fed would like to see, data points suggest oil demand is picking up. 

The Energy Information Administration reported earlier that U.S. crude oil stockpiles dropped by 4.37 million barrels in the week ending Sept. 13, well beyond expectations for a decline of 1.39 million barrels and far past a decline of 219,000 barrels in the previous week. 

In U.S. economic news out Wednesday, the Commerce Department said single-family housing starts jumped 7% last month to an annual rate of 628,000 units, the highest level in six months. New construction for apartments and condominiums fell 11.1%. Permits for single-family homes rose 3% to the highest level since May 2008. 

Oil futures could continue to rise on the expectation that with QE remaining in place for the foreseeable future, the U.S. dollar will weaken. Oil is denominated in dollars. 

Elsewhere, Brent futures for November delivery rose 0.26% to USD110.86 per barrel on the ICE Futures Exchange. - investing.com

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Gold jumps after Fed says no to tapering

                 Gold futures surged in the early part of Thursday’s Asian session as the Federal Reserve surprised markets by opting not to alter its USD85 billion-per-month bond-buying program known as quantitative easing. 

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery soared 4.28% to USD1,363.60 per troy ounce in Asian trading Thursday. The December contract settled lower by 0.14% at USD1,307.60 per ounce on Wednesday. 

Gold futures were likely to find support at USD1,334.60, the high from Sept. 15 and resistance at USD1,375. 

Many investors felt the Fed would announce plans to trim the amount of bonds it buys each month to spur recovery, a stimulus tool known as quantitative easing that drives down long-term interest rates and weakens the dollar to spur recovery, a recipe for rising gold prices. However, the Fed surprised markets by saying tapering of its easing efforts is tied to economic data and not the calendar. 

That could be taken as a sign that the central bank does not yet feel the U.S. economy, the world’s largest, is far enough along in the recovery cycle to withdraw stimulus measures. 

The Fed also appears to be betting that by keeping easing in place, the U.S. economy will be able to continue adding jobs and with the specter of tapering gone, mortgage rates will fall and stimulate housing demand, an integral part of U.S. GDP. 

In U.S. economic news out Wednesday, the Commerce Department said single-family housing starts jumped 7% last month to an annual rate of 628,000 units, the highest level in six months. New construction for apartments and condominiums fell 11.1%. Permits for single-family homes rose 3% to the highest level since May 2008. 

Elsewhere, Comex silver for December delivery surged 6.46% to USD22.958 per ounce while copper for December delivery rose 0.16% to USD3.322 an ounce. - investing.com

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Gold may get support on US debt ceiling, Middle East issue: ETFS

      LONDON (Bullion Street): Gold under pressure as Syria military attack averted and investors focus on possible Fed tapering. Precious metals declined last week as concerns about an imminent attack on Syria by the US abated and investors continued to focus on the possible announcement of a reduction in Fed bond buying this week, according to a weekly review by ETF Securities Ltd (ETFS).

Palladium was the only precious metal to hold up, as improving global economic conditions and continued strong auto sales lend support. In our view, once the market has put FOMC tapering clarification in the rear view mirror, the focus will likely focus on other issues. Some of these issues include the need to raise the US debt ceiling in the next month or so or face government shut-down, continued upheaval in the Middle East and the Fed’s need to keep bond yield increases in check given its large debt servicing burden. All of these factors should be gold price supportive. On top of these factors, China and central bank physical gold demand remains robust and gold jewellery recycling has dropped sharply, tightening the physical supply-demand balance (as reflected in low to negative gold forward rates). These factors should help to keep a floor on the gold price.

And any sign of slower growth in the US or of Fed dovishness in the coming months has the potential to push the gold price higher. A key potential beneficiary of a stable gold price and rising industrial growth is silver. Platinum and palladium back in focus as industrial cycle turn up. Palladium bucked the bearish precious metals trend, showing a modest gain last week. The fundamentals of palladium remain positive in our view with rising vehicle sales in the US and China combined with constrained supply expected to keep the metal in supply deficit this year and next. ETFS report said.

Among the precious metals, palladium has the highest industrial demand exposure at nearly 80%, and thus stands in a particularly strong position to benefit as the global economy improves. Catalytic converters are the primary source of demand, notably for gasoline engines.

Emerging market demand, coupled with tightening emission regulations are expected to help sustain an excess of demand over supply through 2014 (see chart on the following page). Platinum has also gained some favor recently due to the recovery in Europe. Platinum tends to be used more in diesel vehicles and Europe is the world’s largest market for diesel passenger cars.

Platinum and palladium are among the few commodities in supply deficit. Palladium is the same price as November 2010, yet cumulative 12-month vehicle sales have increased about 17% since then. Platinum is the same price as November 2007,despite the fact that cumulative vehicle sales have increased about 30% (see chart below). Absent a shift lower in global vehicle sales, the outlook for platinum and palladium appears quite favourable in our view, ETFS report added.

Key events to watch this week
The FOMC statement on the 18th and potential reduction in the bond buying program will likely be the focus this week. Renewed tensions in Syria would raise attention as may the approaching US budget debate. Data will likely take a back seat, with industrial production and CPI in the US prominent. In the EU, CPI and vehicle registrations should be highlights. - Bullionstreet.com

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Monex Precious Metals Review: Gold support $1308, Silver resistance $22.19

     NEW YORK: Monex spot gold prices opened the week at $1,387 . . . traded as high as $1,390 on Monday and as low as $1,308 on Friday . . . and the Monex AM settlement price on Friday was $1,309, down $78 for the week.  Gold support is now anticipated at $1,308, then $1,278, and then $1,249 . . . with resistance anticipated at $1,350, then $1,386, and then $1,420.

Silver
Monex spot silver prices opened the week at $23.58 . . . traded as high as $23.81 on Monday and as low as $21.65 on Friday . . . and the Monex AM settlement price on Friday was $21.74, down $1.84 for the week.  Silver support is now anticipated at $21.42, then $20.86, and then $19.58 . . . and resistance anticipated at $22.19, then $23.05, and then $24.78.

Platinum
Monex spot platinum prices opened the week at $1,491 . . . traded as high as $1,491 on Monday and as low as $1,433 on Friday . . . and the Monex AM settlement price on Friday was $1,441, down $50 for the week.  Platinum support is now anticipated at $1,427, then $1,396, and then $1,328 . . . and resistance anticipated at $1,458, then $1,497, and then $1,544.

Palladium
Monex spot palladium prices opened the week at $694 . . . traded as high as $702 on Wednesday and as low as $682 on Monday . . . and the Monex AM settlement price on Friday was $699, up $5 for the week.  Palladium support is now anticipated at $685, then $662, and then $634 . . . and resistance anticipated at $702, then $718, and then $738. - www.monex.com

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Crude Oil lower after U.S., Russia reach Syria deal

                   Crude Oil futures traded lower in the early part of Tuesday’s Asian session after the U.S. and Russia agreed over the weekend on terms to dismantle Syria's chemical weapons cache. 

On the New York Mercantile Exchange, light, sweet crude futures for October delivery fell 0.65% to USD105.90 per barrel in Asian trading Tuesday. The October contract settled down 1.50% at USD106.59 per barrel on Monday. 

The U.S. and Russia Syria one week to disclose its chemical weapons stockpiles, which will go undergo inspections by November. Russia intervened to broker a diplomatic solution after it became apparent the U.S. would entertain thoughts of a military strike against Syria for using chemical weapons against its own citizens. 

Tepid economic data out of the U.S., the world’s largest oil consumer, also pressured crude. In U.S. economic news out Monday, a report from the Federal Reserve today showed U.S. industrial production rose 0.4% last month after a flat reading in July. The August increase was the biggest in six months. Housing and automobile production paced the gains. 

The New York Federal Reserve’s Empire State Manufacturing survey fell to 6.29 from 8.24 in August. Economists expected a reading of 9.20. The new orders index rose to 2.35 from 0.27 while shipments soared to 16.43, the highest level in more than a year, from 1.47. Readings above zero indicate expansion. 

Elsewhere, Libyra restarted some production at the El Feel and Sharara fields after talks between the government and striking workers. Libya’s oil production has plunged to a mere 250,000 barrels per day amid geopolitical and labor strife. The country was producing more than five times that in early 2011. Libya, an OPEC member, is home to Africa’s largest oil reserves. 

Meanwhile, Brent futures for October delivery inched down 0.05% to USD109.60 per barrel on the ICE Futures Exchange. - investing.com

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Crude Oil Tumbles As Traders Book Profits

                      Crude oil is trading at 106.68 easing by 86 cents this morning, while Brent oil is trading at 110.80 down by 93 cents. Oil prices falls were limited by the severe drop in the US dollar which fell hard after FOMC member Larry Summers withdrew his nomination for Mr. Bernanke’s position as Director of the Federal Reserve, when Mr. Bernanke steps down in January 2014. Crude oil prices settled marginally lower on Friday on the back of a stronger dollar. Meanwhile, some profit booking also weighed on the prices as WTI and Brent gained 1% in the previous trading session. WTI crude capped its biggest weekly drop since July. Energy saw their biggest declines early in the week as an agreement appeared to emerge that would avert—or at least delay—a U.S. strike on the Syrian government in retaliation for its use of chemical weapons. Syria is only a minor oil producer, but investors have worried that conflict in the region would set off a chain reaction of turmoil elsewhere and disrupt more significant production centers—much as the “Arab Spring” uprising that began in Tunisia eventually led to a sharp decline in Libyan production. As the prospect of an attack on Syria faded, oil prices fell from the two-year high they had reached on the previous Friday. Another factor boosting sentiment may have been investors’ increasing comfort level with potential changes in monetary policy emerging from the Federal Open Market Committee meeting on September 17 and 18. Many economists expect that policymakers will decide to reduce the pace of the Fed’s purchases of long-term bonds, which have helped keep long-term interest rates very low even as economic prospects have improved. Improving conditions in both the housing and labor markets, and new found strength in U.S. manufacturing and energy production, should provide support for commodities over the longer term.

Natural gas is trading at 3.687 up by 11 points this morning. Natural gas futures ended higher on Friday, backed by this week’s supportive inventory report and expectations for a light build next week, but the upside was limited by the milder weather expected next week which should slow demand. On a weekly basis, Nymex natural gas prices gained by more than 4 percent on account of less than expected rise in US natural gas inventories. Further, weakness in the DX supported an upside in prices. Gas prices touched a weekly high of 3.689 and closed at 3.676 in last trade of the week. Large-scale gas exports from the United States will narrow the gap between U.S. domestic prices and those in Asia, but the boost to U.S. domestic gas prices is likely to be smaller than U.S. gas producer’s hope and consumers fear. - FxEmpire.com

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Copper trims gains from Summers rally with Fed meeting in focus

             Copper futures were higher on Monday, albeit off the best levels of the session, as investors looked ahead to the Federal Reserve’s upcoming two-day policy meeting, which concludes on Wednesday, amid ongoing speculation over the timing of the central bank’s widely expected reduction in monthly bond purchases.

On the Comex division of the New York Mercantile Exchange, copper futures for December delivery traded at USD3.213 a pound during European morning trade, up 0.3%. 

Copper prices rose by as much as 2.1% earlier in the day to hit a session high of USD3.271 a pound. The December contract settled 0.2% lower at USD3.203 a pound on Friday.

Copper prices were likely to find support at USD3.191 a pound, Friday’s low and the weakest level since August 8 and resistance at USD3.282 a pound, the high from September 11.

Copper futures rallied sharply as the U.S. dollar sank after former U.S. Treasury secretary Larry Summers withdrew himself from consideration to be the next Federal Reserve chairman.

Summers’ withdrawal leaves Fed Vice Chairwoman Janet Yellen as the frontrunner for the job, who some analysts say may favor a slower reduction in U.S. stimulus.

The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 0.4% to trade at 81.34, trimming an earlier loss of as much as 0.6%.

Traders now turned their attention to this week's U.S. monetary policy decision on Wednesday, amid speculation the Fed will start tapering its bond-buying program at its upcoming policy meeting this week.

The central bank is scheduled to meet September 17-18 to review the economy and assess policy.

Market analysts expect the Fed will cut monthly purchases of Treasuries by USD10 billion to USD35 billion and keep mortgage-bond buying unchanged at USD40 billion.

The Fed’s stimulus program is viewed by many investors as a key driver in boosting the price of commodities as it tends to depress the value of the dollar.

Elsewhere on the Comex, gold for December delivery rose 0.5% to trade at USD1,314.80 a troy ounce, while silver for December delivery advanced 0.65% to trade at USD21.86. - investing.com

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Silver futures climb 1% as Summers withdraws from Fed chair race

                   Silver futures kicked off the week with strong gains on Monday, after former U.S. Treasury secretary Larry Summers removed himself from consideration to be the next head of the Federal Reserve.

On the Comex division of the New York Mercantile Exchange, silver futures for December delivery traded at USD21.88 a troy ounce during European morning trade, up 0.75%. 

Silver prices rose by as much as 3.15% earlier in the day to hit a session high of USD22.43 a troy ounce. The December contract settled 1.94% lower at USD21.72 a troy ounce on Friday.

Silver prices were likely to find support at USD21.42 a troy ounce, Friday’s low and resistance at USD23.19, the high from September 12.

The U.S. dollar tumbled against its major counterparts after Summers pulled out of the race to be the next Fed chairman, easing investor concerns that he would aggressively scale back economic stimulus measures.

“I have reluctantly concluded that any possible confirmation process for me would be acrimonious and would not serve the interests of the Federal Reserve, the Administration, or ultimately, the interests of the nation’s ongoing recovery,” Summers wrote in a letter to President Barack Obama.

Summers’ withdrawal leaves Fed Vice Chairwoman Janet Yellen as the frontrunner for the job, who some analysts say may favor a slower reduction in U.S. stimulus.

The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 0.45% to hit 81.32, the lowest level since August 28.

Dollar-denominated silver futures contracts tend to rise when the dollar falls, as this makes commodities cheaper for buyers in other currencies.

Meanwhile, investors shifted their focus to the Fed’s upcoming two-day policy meeting, which concludes on Wednesday, amid ongoing speculation over the timing of the central bank’s widely expected reduction in monthly bond purchases.

Moves in the silver price this year have largely tracked shifting expectations as to whether the U.S. central bank would end its quantitative easing program sooner-than-expected.

Elsewhere on the Comex, gold for December delivery rose 0.7% to trade at USD1,317.70 a troy ounce, while copper for December added 0.4% to trade at USD3.217 a pound.  - investing.com

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Crude Oil lower on slack U.S. data, waning Syria fears

                                   Crude Oil futures traded lower in the early part of Monday’s Asian session as traders in the region digested some slack U.S. data points that were published last Friday. 

On the New York Mercantile Exchange, light, sweet crude futures for October delivery fell 0.80% to USD107.34 per barrel in Asian trading Monday. The October contract settled lower by 0.36% at USD108.21 per barrel on Friday. 

Oil futures were likely to find support at USD106.44 a barrel, the low from September 10 and resistance at USD110.44 a barrel, the high from September 9. Last week, Nymex oil futures lost 2.45%, the biggest weekly decline since the week ended July 26. 

Oil futures were pressured last Friday after after the Commerce Department said U.S. retail sales rose 0.2% in in August, below expectations for a 0.4% increase. 

A separate report showed that the preliminary reading of the University of Michigan’s consumer sentiment index fell to a five month low of 76.8, from a final reading of 82.1 in August. 

On Saturday, U.S. Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov agreed on a framework for Syria to destroy its chemical weapons stockpile by the middle of 2014. Under the agreement, Syrian President Bashar al-Assad will be required to declare his country’s stockpiles of chemical weapons by September 20. 

Oil had climbed higher on speculation the U.S. could attack Syria on its own, but now that more diplomatic options are being used, some of the air is coming out of the long oil trade. 

Meanwhile, Spanish oil giant Repsol has told investment bankers it would like to purchase a Canadian or U.S. oil and gas production firm for $5 billion to $10 billion, according to the Wall Street Journal. 

China, the world’s second-largest oil consumer behind the U.S., will spend USD13.07 billion this year on oil and gas exploration and production activity, according to state media. 

Elsewhere, Brent futures for October delivery fell 0.85% to USD110.78 per barrel on the ICE Futures Exchange. - Investing.com

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Gold Traders Uneasy – Spark Temporary Rally

  

                         Gold reacted quickly to Mr. Summer’s withdrawal of his nomination to head the FOMC. Gold climbed by $22.00 in the early morning session to trade at 1331.00. Exactly why a possible nomination is having such a huge market effect is an indication of the frayed nerves of commodity traders ahead of this week’s FOMC meet and possible taping. Syria weighed heavily on the markets over the last two weeks exhausting traders. Gold gained as the dollar dropped to the lowest level in a month after Lawrence Summers withdrew from consideration. Silver rallied from its worst week since June.

The U.S. and Russia held talks on a plan for Syria to surrender chemical weapons to avert a strike that could stoke Middle East tensions and announced a successful conclusion and a plan to move forward easing market tensions. The Federal Reserve is expected to announce its first move to taper its $85 billion in monthly bond buying when its two-day meeting ends Wednesday. While the Fed is seen curbing bond purchases by an initial $10 to $15 billion — a relative baby step compared to the massive amount of stimulus applied — it sends an important message that the Fed is moving toward a normalization of rates and expecting a more normal economy. While the Fed meeting in the week ahead tops the list, Congressional budget maneuvering and any developments on Syria will also get attention. The United Nations is expected to receive a report Monday which should show if Syria used chemical weapons on its citizens.

Silver is trading at 22.193 gaining 47 cents as the US dollar weakened to trade at 81.26 down by 42 points following cues from gold. The tonnage of silver bullion bars held by the US silver ETF increased around 30 tons or. 0.3 percent to 10,536.70 tons. Precious metals are expected to trade with a mixed note on the back of ease in concerns in QE tapering from Federal Reserve in its meeting during the week. The base metals pack on the LME traded on a negative note in the last week due to concerns regarding QE taper which could be announced in the FOMC meeting this week and mixed economic data from the advanced economies. However, weakness in the DX and decline in inventories prevented sharp decline in the base metals on the LME. Copper gained this morning as the US dollar tumbled. Copper prices on the LME slipped around 1.3 percent in last week and touched a low of $7024/ton on Friday. Prices declined during the later part of the week on the back of favorable economic data from US increased concerns of QE tapering from the Federal Reserve.

Further, decline in industrial production data from Euro Zone exerted downside pressure on prices. In the early part of the week, prices rose on account of positive economic data from Chinese economy. - Fxempire

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