Oil And Gold Analysis: April 11, 2014
ICM Brokers | Apr 11, 2014 06:21AM ET
Crude Oil
West Texas Intermediate oil headed for a weekly gain amid signs of rising fuel demand while its discount to London’s Brent narrowed to the smallest gap in more than six months on speculation exports from Libya may increase. Storage tanks are filling as new pipelines carry light, sweet oil found in shale formations to the coast and U.S. law keeps companies from moving it out. Most crude exports are banned and the 13 ships that can legally move oil between U.S. ports are booked solid. The federal Jones Act restricts domestic seaborne trade to vessels owned, flagged and built in the U.S. and crewed by citizens. While Brent crude fell for the first time in three days on speculation that Libyan oil exports will increase next week. West Texas Intermediate’s discount to Brent shrank to the least in almost seven months. Libya aims to ship the first tanker from the harbor of Hariga since rebels handed the terminal over to the government earlier this week, an oil ministry official said. The possible return of supply is weighing on prices, said Seth Kleinman, Citigroup Inc.’s London-based head of energy research. Crude slipped 0.2 Percent.
Gold
The fight for Osisko follows last year’s slump in gold prices that dragged down the valuation of producers and created an opportunity for companies looking to add mines to replenish their reserves. Yamana and Vancouver-based Goldcorp covet Osisko’s main asset, the Canadian Malartic operation. Goldcorp Chief Executive Officer Chuck Jeannes has said he would rank the Quebec project among his company’s top mines based on free cash flow, output and net asset value. Hedge funds and other speculators misjudged gold prices for a second time in three weeks. Just after the investors sold bullion holdings for a second consecutive week, a disappointing U.S. jobs report sparked the biggest rally in prices since mid-March. Their funds fared better in the five preceding weeks, correctly adjusting wagers 80 percent of the time. Investors who were anticipating gold’s 2014 rebound would fizzle had reason to be confident at the start of last week. As U.S. The dollar briefly pared a decline against the gold after jobless claims decreased by 32,000 to 300,000 in the week ended April 5, the lowest since May 2007, a Labor Department report showed today in Washington.
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