Oil hovers near 10-month lows amid European dispute on price ceilings
Oil prices fell in European trade on Thursday for another session, almost hitting 10-month lows amid mounting dispute between EU countries on price ceilings for Russian crude.
Such considerations overcame recent US data that showed a larger than expected inventory drawdown in crude stocks last week.
Global Prices
US crude fell 0.6% to $76.97 a barrel, with a session-high at $78.18, while Brent declined over 0.5% to $84.09 a barrel.
US crude lost 4.5% on Wednesday, while Brent declined 4.4%, resuming the losses after a short hiatus.
European Dispute
Talks among European countries on putting a price ceiling for Russian crude are hindered with government split on how to design the plan.
The executive branch of the EU suggested putting the ceiling at $65, with Poland and the Baltic countries considering it too generous.
Other countries with large shipping industries like Greece and Malta refused to push prices below $70, which was the upper limit imposed by the EU earlier this week.
US Stocks
The Energy Information Administration reported a tumble in US crude stocks by 3.7 million barrels to 431.7 million barrels, while analysts expected a drop of 2.5 million barrels.
Gasoline stocks rose 3.1 million barrels to 211 million barrels, while distillate stocks rose 1.7 million barrels to 109.1 million barrels.
Dollar hovers near three-month lows on Fed rates prospects
Dollar fell in European trade against a basket of major rivals, sharpening the decline for the third straight session and almost hitting three-month lows amid renewed selloff pressures on the currency following weak US data and Fed's minutes.
It's now clear that Fed members are preparing for a slower pace of rate hikes, paving the way for a 0.5% rate hike in December.
The Index
The dollar index fell 0.4% to 105.63 with a session-high at 106.07, while closing 1% lower yesterday, the second loss in a row, with the index approaching recent three-month lows at 105.34.
Weak Data
Recent US data showed industrial activities slowed down sharply for the first time in 2-1/5 years as increased interest rates hampered new orders.
The data overall showed a decline in services and industrial activities in November for the fifth month in a row, a sign of recession.
The Fed
Fed's minutes yesterday showed US policymakers are content about the slowdown in inflation, and are moving toward smaller rate hikes.
Fed Rates
Chances of a 0.5% rate hike rose from 75% to 85%, while chances of 75% rate hike fell from 25% to 15%.
Gold extends gains on prospects of Fed rates
Gold prices rose in European trade on Thursday for the third session in a row amid support from the dollar against a basket of major rivals, following weak US data and the release of Fed's minutes.
It's clear that Fed members are preparing for a slower pace of rate hikes, paving the way for a 0.5% rate hike in December.
Gold Prices Today
Gold prices rose 0.5% to $1,758 an ounce, after rising 0.5% yesterday, the second profit in a row, moving away from two-week lows at $1,723 an ounce.
The Dollar
The dollar index fell 0.4% on Thursday for the third straight session, moving towards three-month lows at 105.3 against a basket of major rivals.
Weak Data
Recent US data showed industrial activities slowed down sharply for the first time in 2-1/5 years as increased interest rates hampered new orders.
The data overall showed a decline in services and industrial activities in November for the fifth month in a row, a sign of recession.
The Fed
Fed's minutes yesterday showed US policymakers are content about the slowdown in inflation, and are moving toward smaller rate hikes.
Fed Rates
Chances of a 0.5% rate hike rose from 75% to 85%, while chances of 75% rate hike fell from 25% to 15%.
The SPDR
Gold holdings at the SPDR Gold Trust remained flat yesterday at 906.93 tones, the highest since November 14.
