Friday’s Oil And Gold Analysis

CL
Oil prices edged to 6-month lows on Thursday after Wednesday's U.S. inventory data continued to dampen spirits, while ongoing expectations for Libya to ramp up its output to normal levels also pressured prices lower. Wednesday's supply data continued to pressure prices lower on Thursday, especially figures on refined crude products. The U.S. Energy Information Administration said in its weekly report that U.S. crude oil inventories fell by 2.68 million barrels in the week ended Jan. 3, beating expectations for a decline of 849,000 barrels. Total U.S. crude oil inventories stood at 357.9 million barrels as of last week. The report also showed that total motor gasoline inventories increased by 6.24 million barrels, significantly higher than expectations for a gain of 2.28 million barrels. Meanwhile inventories of distillates, which include diesel fuel and heating oil, rose by 5.83 million barrels compared to market calls for a gain of 1.90 million. The hikes in refined oil products sent prices falling as did Libyan supply concerns. Oil prices have fallen in recent sessions on expectations for Libyan production to approach normal levels and add to global supply.

GOLD
Gold futures rose on Thursday after bargain hunters snapped up nicely-priced positions in the yellow metal, especially after uncertainty over Friday's jobs report softened the dollar, which trades inversely with the yellow metal. The Federal Reserve has said it will pay close attention to indicators when deciding the fate of its USD75 billion monthly bond-buying program — Fed bond purchases aim to prop up the economy by suppressing long-term borrowing costs, weakening the dollar as a side effect as long as they remain in effect, thus making gold an attractive hedge. By Thursday, however, the dollar cooled its gains as the rally ended ahead of the Friday release of official U.S. December jobs figures, which gave gold prices room to rise on demand from bottom fishers. Earlier Thursday, the Labor Department said the number of individuals filing for unemployment assistance in the U.S. last week fell by 15,000 to 330,000 from the previous week’s revised total of 345,000. Economists had expected jobless claims to decline by 10,000, though investors were largely eager to see the December jobs data by afternoon trading on Thursday.