Author: SondraHunter

Gold prices hovered near $1800 an ounce early this morning after soaring more than 2 percent in the previous session, supported by investor safe haven demand as Italy took center stage in the eurozone debt crisis.

After reaching its correction low of $1,532 per ounce, the gold price has recovered in recent weeks, reaching close to $1,791 in early trading today.

EU Debt Problems – Italy

Italian government bond yields soared to near 15 year highs, putting the EU’s third largest economy front and center of the region’s debt crisis, despite efforts by policymakers scrambling to stem growing contagion.

“Gold will continue to trend higher due to the EU situation and should have no problem rising above $1,800 in the short term.” said Hou Xinqiang, an analyst at Jinrui Futures, adding that prices could correct after gold trades through that level under pressure of profit taking trades.

Latest Price of Gold

Spot gold edged down 0.2 percent to $1,791.40 an ounce by 06.30 GMT, easing from a 6 week high of $1,798.09 hit in the previous session. Gold traded in a narrow range of about $5 during the day.

Technical analysis suggested spot gold could target $1,823 to $1,829 range during the day.

Spot gold prices have rallied nearly 5 percent so far this month, as mounting doubts over the EU’s ability to tackle its 2 year old debt crisis drove investors to safe haven assets, and decoupled gold from other commodities which it had followed through much of the past two months.

“There has been a very observable transfer of gold ounces in terms of investment capital from hedge funds, wholesale funds, bullion banks, toward the retail community, and that has put a floor in the price.” said Michael Jansen, commodities analyst with JP Morgan, who forecasts an average $1,869 for gold prices in 2012.

“Sellers are not eager to cash out before prices hit $1,800. People are basically watching what is going to happen in Europe.” said a Singapore based trader.

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The price of gold nears $1800 on investor safe haven demand

Wall Street fluctuated between gains and losses but managed to closed higher at the end of the day with DJIA and S&P 500 gaining +0.71% and +0.63% respectively. European bourses slipped across the board with the Stoxx600 index slipping around -0.6%. In the commodity sector, crude oil gained with the benchmark WTI contract rising for a 4th consecutive to 96.11 before settling at 95.52, up +1.34%, and the equivalent Brent crude contract surging to a 2-month high of 115.23 before ending the day at 114.56, up +2.31%. Safe-haven demand for gold returned with the yellow metal gaining +1.99% to 1791.1.

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Eurozone Peripheral Bond Yields Surge amid Political and Fiscal Uncertainties

Oil prices open Friday’s trading session higher after news that the Greek PM is to scrap a referendum plan on eurozone membership and instead set his sights on winning a confidence vote, which saw stock markets and commodities rally late Thursday.

Latest Oil Prices

US WTI crude oil futures for December 2011 delivery was trading at $94.37 a barrel, 07.20 GMT this morning in electronic trading on the NYMEx, while European Brent oil futures were trading at $110.96.

Greek Referendum

Capping a day of extreme political turbulence in Athens, George Papandreou told his colleagues that there was no need for a referendum after the conservative opposition promised to support the terms of a €130bn bailout from the EU, ECB and IMF.

“Failure to back the package would mean the beginning of our departure from the euro, but if we have consensus, then we don’t need a referendum.” said Mr Papandreou.

Global stock markets rose amid signs the eurozone had been pulled back from the brink of disintegration by the eleventh hour concord in Greece.

The Greek premier dramatically scrapped the referendum he said he had called because of political divisions in Athens over the difficult package. On Thursday he said: “We had a dilemma: consensus or a referendum. Failure to back the package would mean the beginning of our departure from the euro.”

Mr Papandreou is due to face a vote of confidence in the Greek parliament on Friday night.

Stock markets have once again been rocked by the latest twists and turns surrounding Greece and wider implications that problems in the eurozone could spread to other countries including Italy.

Both Brent and WTI oil prices have been broadly tracking market movements as the crisis unfolds.

Originally posted here: 
Oil prices recover after news that Greek PM to scrap referendum plan

Volatility remained as driven policy changes. Equities rallied as the ECB cut interest rates surprisingly and Greece decided to cancel the referendum. Wall Street jumped with DJIA and S&P 500 gaining +1.76% and +2.20% respectively. In the commodity sector, both crude benchmarks jumped with WTI and Brent contracts rising +1.69% and +1.36% respectively.

Read more:
Investors Thrilled by ECB Rate Cut, Greece Drops Referendum

Brent oil futures open today’s trading session back near $108 a barrel as commodity prices slip on a stronger US dollar, although it’s expected that demand will remain strong as traders pointed to the tight underlying physical markets.

Latest Brent Oil Price

In London, Brent crude oil futures for December 2011 delivery was trading at $108.45 a barrel, 07.10 GMT this morning on the ICE Futures Exchange. The contract closed Monday’s session at $109.25 a barrel, or 0.6 percent lower.

Oil Demand and Prices

The demand for oil and higher prices pointed to wider margins for refiners, suggesting that demand for crude oil would remain strong.

“Margins in the last two weeks have gone up by $3 to $4 in Europe.” said James Zhang, an oil analyst at Standard Bank.

Meanwhile, Kuwait’s Oil Minister Mohammad al-Baseeri said on Monday that world demand for crude oil is forecast to remain high and put pressure on supply even after Libya returns to pre-crisis production.

“Libya’s return to full production is still very slow and is expected to take time to reach pre-crisis production. But regardless of whether Libya’s production returns or not, the world market will continue to need more oil, increasing the burden on main OPEC producers.” Baseeri told reporters on the sidelines of the Kuwait Financial Forum.

Europe’s Debt Rescue Plan

Meanwhile, traders and investors are looking ahead to the Franco-German meeting on Tuesday, where politicians from the two sides were expected to further discuss the European debt rescue plan broadly agreed upon last week, dealers said.

“This meeting could be a key issue.” said Phillip Futures commodity analyst Ker Chung Yang, who added that traders were also eyeing a US Fed meeting and the US jobs report both due later in the week.

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Brent oil price slips back to $108 although demand remains strong

Brent oil futures closed off the week’s trading session back at $110 a barrel as traders and investors agreed that Europe has much more work to do concerning ongoing debt problems in Greece and other EU countries.

Brent Oil Futures – Closing Price

ICE Brent crude oil futures for December 2011 delivery ended the week’s trading session at $110.05 a barrel on the ICE Futures Exchange, trading 1.8 percent lower at close yesterday.

Brent oil futures closed last week’s session (Friday 21st October) at $109.65 a barrel.

Euro Debt Rally Overdone?

“There was a bit of euphoria based on the EU meeting and when you look at it, it wasn’t that strong a package. It was a moderate package so it was a little bit surprising to see so much of a rally.” according to Torbjorn Kjus of DNBNor.

“Perhaps prices went too high, we are still lacking a lot of detail on the euro zone deal.” said Christophe Barret of Credit Agricole.

Brent crude oil prices fell more than $1 per barrel on Friday as investors took another look at the details of a financial rescue plan for the eurozone, which has helped boost both Brent and WTI oil prices this week.

Analysts expect that Europe will likely see oil demand fall while Greece and other countries cut spending to get their national debts under control.

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Brent oil price ends week back at $110 as Euro debt problems remain

The price of Brent oil is heading north again, nearing $112 a barrel in trading as stock markets in Europe see big gains off the back of the latest European debt plans that may build confidence globally that the EU is getting a grip on sovereign debt.

Latest Brent Oil Price

In London, Brent crude oil futures for December 2011 delivery was trading at $111.86 a barrel, 08.05 GMT this morning on the ICE Futures Exchange.

Stock Markets Rise

Stock markets seem to indicate support for the plan and oil prices saw a boost, following the markets higher. The euro strengthened and markets rose in Asian and Europe in reaction to the summit’s results.

“This is good news, but far from crisis over. Particularly on boosting the EFSF we don’t have full disclosure yet of how that is supposed to work, so we are waiting to see the fine print.” says James Ashley, Senior Europe Economist at RBC Capital Markets, London.

“Technically and fundamentally, crude oil prices look good. The essential thing is that Europe delivered. Although there are still a lot of problems left, there was some kind of an outcome that was acceptable to the market.” said Tony Nunan, a risk manager with Mitsubishi Corp, Tokyo.

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Brent oil price heads north, near $112 on back of stock market gains

Oil prices rebounded after a statement after the EU summit showed that European leaders have agreed on some critical measures. However, several questions remained unresolved during the meeting and we advise caution on the outlook of European debt crisis. Meanwhile, the Bank of Japan (BOJ) expanded the asset-purchase program as the pace of recovery has been dismal since the earthquake.

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EU Leaders Agreed on Some Measures; BOJ Expanded Stimulus

WTI oil futures open Thursday’s trading session at $92 a barrel as stock markets get a boost from news that a deal has been reached on the debt situation surrounding Europe.

Latest WTI Oil Price

US Light crude oil futures for December 2011 delivery was trading at $92.17 a barrel, 07.05 GMT this morning in electronic trading on the NYMEX. The US contract closed yesterday’s session down 2.5 percent at $90.71, mainly on higher than expected weekly US oil stocks data.

Europe Debt Deal

European leaders have finally reached a three pronged agreement which they say is vital to resolving the region’s massive debt crisis, the news pushed Asian stock markets back into a rally and oil prices are following suit.

“The stock markets, if you look at the Japan Nikkei index, are also reacting positively to this development. The macro event and the financial markets are leading and oil futures are reacting even though the crude inventories in the US have increased substantially.” said Victor Shum of Purvin & Gertz.

US crude oil stocks rose 4.74 million barrels to 337.63 million barrels in the week to 21st October, according to the EIA in a their weekly report yesterday, which was sharply higher compared to analysts projection of a 1.3 million build.

US WTI crude has jumped about 21 percent from a price of around $75 reached on 4th October and oil prices are following stock market patterns over the more traditional supply and demand indicators.

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WTI oil trading at $92 as markets get boost from Europe deal