Commodities
Crude oil prices record gains after tropical storm hit Gulf of Mexico
Tropical Storm Sally picked up its strength in the Gulf of Mexico, west of Florida yesterday.

Published
5 months agoon

Crude oil prices began the first trading session of the week on a bullish note. The feat was triggered after a tropical storm in the Gulf of Mexico compelled major U.S oil producers to shut down their oil rigs, but the upsurge in crude oil prices were capped by growing concerns about the falling demand for gasoline.
At the time of this report, U.S. West Texas Intermediate gained 0.51%, to trade at $37.52 per barrel, and Brent crude prices were up 0.25% to trade at $39.93 per barrel.
Both crude oil contracts ended lower in the previous week, its second consecutive week of decline.
READ: Analysts forecast when Nigeria’s Bonny Light could hit $50
Yesterday, Tropical storm Sally, picked up its strength in the Gulf of Mexico, west of Florida, and was turning to become a category 2 hurricane. The hurricane storm is disrupting oil supplies for the second time in less than four weeks, after hurricane Storm Laura swept through the Gulf coast.
What it means: Usually, crude oil prices surge higher when oil supplies are shut down, however, with the global exponential growth in COVID-19 caseloads, and oil demand falling momentarily, oil traders remain relatively cautious.
Stephen Innes, Chief Global Market Strategist at AxiCorp, in a note to Nairametrics, gave insights into the fundamentals, keenly monitored by oil traders.
READ: Nigeria, only oil producing nation that does not benefit from price increase – Sanusi
“Oil traders are back on hurricane watch, but it is all shoulders and heels while dancing to the tune of broader markets, amid more gloom on the supply-side,”
“Some Gulf of Mexico oil producers, on Saturday, idled production bracing for another hurricane brewing off Florida. But so far, the hurricane impact is getting offset by yet another gloomy short-term view that is likely limiting OPEC’s attempt to stabilize markets,”
READ: Oil prices rally higher, as U.S oil producers suspend operations in Gulf of Mexico
“Reports that Libyan commander, Khalifa Haftar gave his ‘personal commitment’ to reopen the energy sectors, could bring more barrels back to the market at the most unwelcome time of the year,”
“Unquestionably, this could put OPEC+ in an even more giant pickle, when they hold a virtual meeting on Thursday to review the current production intervention level’s price impacts.”
Olumide Adesina is a France-born Nigerian. He is a Certified Investment Trader, with more than 15 years of working expertise in Investment trading. Follow Olumide on Twitter @tokunboadesina or email [email protected] He is a Member of the Chartered Financial Analyst Society.


Commodities
Gold breaks below $1,800 per ounce, amid rising U.S Treasury yields
At the time of writing this report, the blinky metal at the futures market was trading at $1,796.40 per ounce.

Published
15 hours agoon
February 25, 2021
Gold drifted below the $1,800 price level at the fourth trading session of the week due to higher U.S. Treasury yields. Also, U.S. Federal Reserve Chairman, Jerome Powell, maintained that the current ultra-easy monetary policy paused buying pressure on the yellow metal’s appeal.
At the time of writing this report, the blinky metal at the futures market was trading at $1,796.40 per ounce.
What you need to know: Usually, higher inflation boosts the price of the precious metal in principle, but also helps U.S Treasury yields (gold’s arch-enemy), which in turn helps the opportunity cost of holding the safe haven shinny asset.
READ: Gold suffers its worst January performance since 2011 amid rising U.S dollar
The U.S Fed Chief recommitted to getting the world’s largest economy back to full employment during his testimony before the House Financial Services Committee.
He tried calming fears about inflation in the $20 trillion powered economy, emphasizing that he would only start worrying about it if prices began to rise in an aggressive and troubling way.
Benchmark U.S. Treasury yields are currently at the highest levels in a year.
Stephen Innes, Chief Global Market Strategist at Axi, gave further insights on the political macro condition that could determine the precious metal’s future, at least for the midterm, knowing fully well that gold is priced in the U.S dollar.
READ: Nigeria’s first and largest industrial-scale gold mine set to be completed in first half of 2021
“Gold broke below USD1,800/oz. Such a break below that level this month has done some psychological damage to the market, I believe.
“On the political side, President Biden’s incentives look fully aligned with getting the US economy and populations as healthy as possible ahead of the 2022 mid-term elections.
“If both fiscal and monetary policy makes maximum efforts into a post-pandemic recovery, then at the very least we will get temporary inflation along with plenty of debate whether it might become more permanent.
READ: Gold fast losing the battle to Bitcoin
Bottom Line
Gold traders are not keen on going bullish, at least for the near term, on the bias that rising U.S Treasury yields see investors showing less interest in the yellow metal.
Commodities
Oil prices drop as gasoline demand from U.S refineries remain poor
Oil prices suffered significant losses at the mid-week trading session in London.

Published
2 days agoon
February 24, 2021
Oil prices suffered significant losses at the mid-week trading session in London. Oil traders are virtually going short on macros revealing an unexpected build in U.S. crude inventories.
The surge in U.S oil inventories was attributable to the unprecedented cold snap that hit a key energy hub in the world’s largest economy during the previous week thereby pausing gasoline demand from refineries that were forced to close down.
At the time of writing this report, Brent crude was down 0.60% hovering around the $64 per barrel.
READ: Oil prices fall under pressure over rising number of COVID-19 cases in China
However, both major oil benchmarks remained above the $60 price levels.
The most recent data from the American Petroleum Institute revealed a surge of 1.026 million barrels for the week ending Febuary.19. Oil experts had earlier anticipated a 5.372-million-barrel drop.
Stephen Innes, Chief Global Market Strategist at Axi in a note to Nairametrics spoke on prevailing market conditions weighing on the black hydrocarbon
READ: Gold traders go wary over rising U.S. Treasury yields
“With excessively stretched positioning and highly susceptible to any negative news, WTI dropped towards the $61 level after the API stockpiles jumped +1.026 million barrels versus the previous draw of 5.8 million barrels during the period ended on February 19.
“Although the commodity prices dropped following the bearish stockpile data, bulls probably won’t be charging back to the pen en masses as the smoldering embers around the Middle East powder keg threaten to ignite once again as the US-Iran conflict continues to simmer but at a higher heat level today.”
READ: World’s largest oil producer loses four million barrels per day
What to expect: Still, Oil pundits expect more visibility on oil traders move at the end of next week with the next round of monthly OPEC+ meetings. Outside of a rise in geopolitical risk, upside momentum could be limited in the coming days as oil traders wrestle with OPEC+ next move.
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