Oil prices fall on concerns of oversupply as Libyan output recovers- Oil prices fell on Wednesday, weighed down by concerns of oversupply as Libyan output improves and as U.S. gasoline inventories rose despite the peak summer driving season. Libya’s Sharara oil field, the country’s largest, was gradually restarting on Tuesday after a shutdown, although instability in the country means that output there could be volatile, traders said. The next meeting of a ministerial committee of OPEC and non-OPEC states to discuss their production pact has been proposed for Sept. 22. Jeffrey Halley, senior market analyst at futures brokerage OANDA said that the rising U.S. gasoline inventories were “not a good sign during the U.S. summer driving season” during which fuel demand tends to be high. Official inventory data by the U.S. Energy Information Administration is due to be released late on Wednesday. Meanwhile, Bernstein Research warned that low prices and ample supplies were resulting in low oil industry investment levels. However, so far, the deal has had little impact on global inventory levels due to rising supply from producers not participating in the accord, such as Libya and Nigeria, as well as a relentless increase in U.S. shale output. Libya’s Sharara oil field, the country’s largest, gradually restarted on Tuesday after a shutdown earlier this month due to a pipeline blockade. Output from the oilfield recently reached 280,000 barrels per day.
Gold steadies below $1,300; Jackson Hole, Trump remarks in focus – Gold prices held steady near the key $1,300-level on Wednesday, as market players braced for an annual gathering of central bankers, where the heads of the Federal Reserve and European Central Bank are set to deliver speeches on the outlook for monetary policy and interest rates. An annual meeting of top central bankers and economists hosted by the Federal Reserve Bank of Kansas City in Jackson Hole, Wyoming, is set to take place from Thursday to Saturday, with keynote speeches from Janet Yellen and Mario Draghi in the spotlight. Their comments will be closely watched for fresh policy signals from the world’s two most powerful central banks. Meanwhile, U.S. political developments kept investors on edge after President Donald Trump raised the specter of a government shutdown to fulfill a campaign pledge of building a wall at the U.S.-Mexican border. At a rally with his supporters in Phoenix late Tuesday, Trump referred to his vow to build a wall at the border with Mexico and said, “If we have to close down the government, we are building that wall.”
Cooler Weather Forecast Limiting Gains – Natural gas futures spiked higher early in the session on Tuesday, but the rally stalled at $3.035, falling short of the last main top at $3.042. Profit-takers likely stopped the rally, leading to a lower close. The price action could be further proof that the hedge funds like buying the dips, but refuse to buy strength until the fundamentals turn bullish. October Natural Gas futures settled at $2.968, down $0.024 or -0.80%. The catalyst being the selling pressure on Tuesday was likely forecasts for cooler weather over the next two weeks. This news will limit cooling demand from households and consequently from power plants. According to the latest U.S. weather model, temperatures were expected to be cooler than normal until early September. This news means a drop in air-conditioning demand is likely. This also means that U.S. gas consumption is likely to fall to 72.7 billion cubic feet per day (bcfd) next week from around 77.4 bcfd this week.
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