Oil And Gold Analysis: Crude Climbs To 5-Week High
ICM Brokers | Apr 14, 2014 03:30AM ET
West Texas Intermediate Crude Oil climbed to a five-week high as U.S. consumer confidence rose in April while gasoline demand grew. Brent’s premium to WTI shrank. WTI’s weekly advance was the biggest this year. The Thomson Reuters/University of Michigan preliminary index of sentiment climbed to 82.6, the highest level since July. Gasoline demand averaged over four weeks jumped to the most in three months April 4, the Energy Information Administration said yesterday. Prices reduced gains as U.S. equities dropped. The Brent-WTI gap contracted as Libya was poised to boost oil shipments. “As the economy grows, oil demand will grow,” said Tom Finlon, Jupiter, Florida-based director of Energy Analytics Group LLC. “One of the most supportive things you can say about crude is the strong gasoline demand.” WTI for May delivery rose 34 cents, or 0.3 percent, to $103.74 a barrel on the New York Mercantile Exchange, the highest settlement since March 3. The volume of all futures traded was 31 percent above the 100-day average Prices advanced 2.6 percent this week.
Money managers cut their net-long position to the lowest since February in the week ended April 8. The minutes of the Fed’s March meeting the next day played down forecasts, and gold had its biggest weekly gain in a month. “Gold has been so zeroed in on central bank policy that the release of the minutes made it more likely that the Fed is going to taper much more slowly” than some traders expected, said Jeffrey Sica, who helps oversee more than $1 billion of assets as president of Sica Wealth Management in Morristown, New Jersey. “There was such a divergence between what people originally thought the minutes meant.” The outlook for less monetary stimulus helped drive gold prices down 28 percent last year, the most in more than three decades. Prices rebounded in 2014 as signs of faltering economic growth in the U.S. and tensions between Russia and Ukraine revived demand for the metal as a haven.
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