Crude oil prices moved sharply lower on Wednesday, weighed by the U.S. dollar’s recent rebound and as traders grew more cautious ahead of this week’s U.S. supply data
Crude Oil Prices Move Sharply Lower Ahead of Supply Data – Crude oil prices moved sharply lower on Wednesday, weighed by the U.S. dollar’s recent rebound and as traders grew more cautious ahead of this week’s U.S. supply data. The U.S. contract was boosted on Tuesday a result of reduced flows from Canada’s Keystone pipeline, which has been operating below capacity since late last year due to a leak. Oil prices were also supported by the risk of supply disruptions in the Middle East after Israel’s Prime Minister Benjamin Netanyahu said on Sunday that Israel could act against Iran itself, not just its allies in the Middle East, following border incidents in Syria. But traders grew more cautious ahead of this week’s U.S. inventories reports. The American Petroleum Institute was set to publish its weekly report on U.S. oil supplies later Wednesday, while official data by the U.S. Energy Information Administration was expected on Thursday.
Gold Prices at 1-Week Lows as Dollar Remains Supported – Gold prices fell to one-week lows on Wednesday, as strength in the U.S. dollar continued to weigh, although caution ahead of the minutes of the Federal Reserve’s latest meeting and uncertainty surrounding a big U.S. debt auction this week was expected to limit the greenback’s gains. The greenback remained supported against other major currencies despite sustained U.S. deficit worries. The U.S. deficit is projected projected to climb near $1 trillion in 2019 following the recent announcement of infrastructure spending and large corporate tax cuts. The dollar has been pressured lower recently by expectations for a faster pace of monetary tightening outside the U.S., which would lessen the divergence between the Fed and other central banks. Market participants were looking ahead to the minutes of the Fed’s latest policy meeting, due on Wednesday, for potential indications on the pace of future rate hikes. Gold is sensitive to moves in both U.S. rates and
the dollar. A stronger dollar makes gold more expensive for holders of foreign currency, while a rise in U.S. rates lifts the opportunity cost of holding non-yielding assets such as bullion.
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