Crude Oil Prices Ease But Hold on to Gains – Oil prices edged lower on Thursday, but held on the most of their gains from the previous session which came after data showing a record drop in gasoline inventories and indications that the oversupplied global market is starting to rebalance. On Wednesday, the International Energy Agency said global oil supplies fell for the first time in four months in August, while also revising its 2017 oil demand estimate up to 1.6 million barrels a day from its July estimate of 1.5 million. The data came a day after the latest OPEC report that showed oil production from the cartel fell last month for the first time since March. Crude oil inventories rose by 5.88 million barrels last week, the EIA said.
The build came after Hurricane Harvey shut production in some Gulf of Mexico fields and refineries in Texas as some domestic producers also trimmed output to avoid a larger glut at storage. The reports from the IEA and OPEC offset concerns over the EIA stockpile build, supporting prices.
Gold Prices Hold Steady Ahead of U.S. Inflation Data –Gold prices held steady near two-week lows on Thursday, as markets were jittery ahead of the release of a highly-anticipated report on U.S. inflation later in the day. Gold prices remained under mild pressure as risk appetite remained healthy this week after Hurricane Irma appeared to have caused less damage than feared and in the absence of any new provocations from North Korea. Investors were also awaiting U.S. inflation data due later Thursday, which could be a determining factor in the Federal Reserve’s future interest rates decisions. Demand for the U.S. dollar was boosted on Wednesday by hopes a tax reform would soon be implemented by the administration, after U.S. President Donald Trump reached out to both Democrats and Republicans this week. Gold is sensitive to moves in the dollar. A stronger dollar makes gold more expensive for holders of foreign currency.
Warmer Weather Expected; Strong Over $3.080 then $3.152 – Natural gas futures rallied on Wednesday on forecasts for warmer weather over the next two weeks that is expected to drive up air-conditioning demand. According to Thomson Reuters, projected U.S. gas consumption would rise to 72.5 billion cubic feet per day next week from 67.9 bcfd this week if the warmer weather arrives and air conditioning demand increases. Demand this week, however, is expected to be down from 69.3 bcfd seen last week because Hurricane Irma reduced power consumption in Florida and the rest of the Southeast. In the past 30 days, U.S. gas production in the lower 48 states rose to an average of 73.1 bcfd from 71.5 bcfd a year earlier. That was far short of the 74.3 bcfd during the same time in 2015, when output was at a record high. Data also showed that U.S. exports were expected to average 8.5 bcfd this week, up 13 percent from a year earlier. This is because of stepped up deliveries from Louisiana. Exports fell when Hurricane Harvey disrupted the natural gas industry about three weeks ago.
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