| Wed Apr 07 10 11:14 ET |
| Crude oil inventory soared for the 10th consecutive, by +1.98 mmb, to 356.2 mmb. Disappointedly, distillate stockpile also rose while the market had anticipated it to have dropped more than 1 mmb. Decline in gasoline stockpile, however, exceeded market expectations. The front-month contract of WTI crude oil slid after rallying for 4 days. The drop accelerated after the US Energy Department released the inventory report. Currently trading at 85.75, the black gold has erased -1.26% of the gain made over the past few days. Apart from profit-taking, crude oil price retreated as economic data in European countries signaled slowdown in recovery. The Eurozone's 4Q09 GDP remained unchanged from the third quarter, which grew +0.4%. PPI in the 16-nation region rose +0.1% m/m in February, following an expansion of +0.7% in the prior month. Moreover, UK's services PMI dropped to 56.5 in March from 58.4 in February. The market had anticipated a less severe drop to 58. Both the euro and the pound weaken further against the dollar. Strength in USD is also negative for oil prices. Gold price soared despite strength in USD and decline in oil prices. The benchmark contract rose to as high as 1149, the highest level since January. Rally in gold price in EUR-terms in spite of the single currency's recent weakness indicates gold does not only determined by currency movement. Advance in gold price when the dollar rises suggests underlying strength in the yellow metal. |
Source: Bloomberg, API, EIA     |
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