Crude Oil Prices May Bounce After Plunge on EIA Inventory Data

CRUDE OIL GOLD TALKING POINTS:

  • Crude oil prices drop to a 13-month low as oversupply fears reemerge
  • Gold prices fall as firming Fed view boosts yields despite risk aversion
  • EIA inventory data echoing API forecast might offer crude oil a lifeline

Crude oil prices swooned as global oversupply fears returned. The drop followed a report from SP Global Platts saying China’s crude inventories quadrupled in October. It added that a further build is likely in November as demand wanes. Doubts about the potency of further OPEC supply cuts were already swirling, with the large restocking by the world’s second-largest oil consumer seemingly pushing prices over the edge.

The plunge spilled over into broader risk aversion, with energy-linked names leading Wall Street to its largest one-day drop in a month. Rebuilding Fed rate hike expectations seemed to compound the selloff. In fact, Treasury bond yields and the US Dollar rose despite the risk-off mood as the 2019 tightening path implied in Fed Funds futures steepened. Not surprisingly, anti-fiat gold prices fell against this backdrop.

CRUDE OIL PRICES MAY BOUNCE ON EIA INVENTORY DATA

Looking ahead, crude

Article source: https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/commodities/2018/11/21/Crude-Oil-Prices-May-Bounce-After-Plunge-on-EIA-Inventory-Data.html