Oil Tanks, Gold Meanders
ICM Brokers | Aug 14, 2015 04:58AM ET
CL
U.S. crude futures fell to fresh six-year lows on Thursday amid a stronger dollar, as energy traders continued to unload long positions upon concerns of a glut of oversupply on global markets. While U.S. crude stockpiles fell for a second consecutive week on Wednesday, traders preferred to focus more intently on long-term forecasts for dwindling production. For 2015 as a whole, the U.S. Energy Information Administration (EIA) lowered supply-growth estimates to 650,000 barrels per day, below prior forecasts of a 750,000 bpd build by 100,000. The Energy Department's supply forecasts still exceed demand growth expectations of 400,000 bpd, which remained unchanged.
GOLD
Gold prices dipped mildly on Thursday as investors looked for shifts in the outlook for Asian economies after China's surprise devaluations this week. Overnight, gold futures erased some of their gains from Wednesday's surge, as investors locked into profits earned in the prior session and the People's Bank of China soothed markets by insisting there is no basis for further devaluation of the yuan. During a press conference in Beijing, PBOC deputy governor Yi Gang said the central bank is hoping to accelerate foreign exchange market development by improving its yuan pricing mechanism both offshore and on the China mainland. In addition, Gang emphasized that the PBOC has ample foreign exchange reserves to provide strong support for significant depreciation in the currency. Gang also went to great lengths to dismiss reports that the PBOC could depreciate the yuan by as much as 10% on a long-term basis. In the U.S., initial jobless claims remained near historic lows at 274,000 last week, just above consensus estimates of 270,000. The four-week average, meanwhile, fell by 1,750 to 266,250, a level approximately 15,000 lower from a month earlier.
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