Crude oil prices were higher on Monday, supported by tensions in the Middle East and global supply cut efforts
Crude Oil Prices Supported by Middle-East Tensions – Crude oil prices were higher on Monday, supported by tensions in the Middle East and global supply cut efforts, although concerns over rising U.S. production lingered. Prices strengthened after Israel’s Prime Minister Benjamin Netanyahu said on Sundaythat Israel could act against Iran itself, not just its allies in the Middle East, following border incidents in Syria. The commodity also remained supported after United Arab Emirates energy minister Suhail al-Mazroui said last week that oil producers led by Saudi Arabia and Russia aim to draft an agreement on a long-term alliance to cut output by the end of this year. The Organization of the Petroleum Exporting Countries (OPEC), along with some non-OPEC members led by Russia, agreed in December to extend oil output cuts until the end of 2018. The deal to cut oil output by 1.8 million barrels a day (bpd) was adopted last winter by OPEC, Russia and nine other global producers. The agreement was due to end in March 2018, having already been extended once. However fears that rising U.S. output could dampen OPEC’s efforts to rid the market of excess supplies have systematically limited oil prices’ gains recently.
Gold Prices Slip Lower on Stronger U.S. Dollar – Gold prices slipped lower on Monday, pulling away from a three-and-a-half week high as the U.S. dollar remained supported by Friday’s strong U.S. housing sector data. Trading volumes were expected to remain limited as U.S. markets were closed on Monday in observance of Presidents’ Day. The greenback strengthened after data on Friday showed that U.S. homebuilding increased to more than a one-year high in January and that building permits soared to their highest level since 2007. The upbeat report overshadowed fresh concerns over the deficit in the U.S., which is projected to climb near $1 trillion in 2019 following the recent announcement of infrastructure spending and large corporate tax cuts.
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