Crude oil prices slipped lower on Wednesday, as news of a rise in U.S. stockpiles dented optimism surrounding global efforts to limit output.
Crude Oil Prices Slip Lower on Downbeat Supply Data – Crude oil prices slipped lower on Wednesday, as news of a rise in U.S. stockpiles dented optimism surrounding global efforts to limit output. Oil prices weakened after the American Petroleum Institute reported late Tuesday that crude inventories rose by 933,000 barrels in the week ending Feb.23, albeit less than the expected increase of 2.7 million barrels. Market participants were now looking ahead to official data by the U.S. Energy Information Administration, due later Wednesday. Fears that rising U.S. output could dampen global efforts to rid the market of excess supplies have systematically limited oil prices’ gains recently. 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.
Gold Prices Mildly Recover as Markets Digest Powell Remarks – Gold prices eased off a two-and-a-half week low on Wednesday, as markets took a breather after comments by Federal Reserve Chair Jerome Powell in the previous session weighed heavily on the precious metal. Fed Chair Jerome Powell reiterated on Tuesday that the U.S. central bank would likely move forward with gradual increases in interest rates. Powell was speaking at his first semi-annual monetary policy testimony to the House Financial Services Committee since taking over the helm of Fed earlier this month. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was little changed at 90.29, after hitting a two-and-a-half week peak of 90.41 overnight. 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. Gold prices also recovered after data on Wednesday showed that China’s net gold imports increased by 65.2% in January. China is the world’s top gold consumer.
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