By Chris Flood
Published: December 9 2009 11:59 | Last updated: December 9 2009 11:59
Crude oil prices staged a rebound on Wednesday ahead of the latest US inventories data while gold steadied as the dollar came under renewed pressure.
In energy markets, Nymex January West Texas Intermediate rose $1.02 to $73.64 a barrel, while ICE January Brent gained 68 cents at $75.87 a barrel.
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US crude stocks were expected to have risen 600,000 barrels last week, according to a poll of analysts by Reuters while gasoline stocks were expected to have increased 1.5m barrels. Demand for petrol was expected to have fallen after the Thanksgiving holiday.
Nymex January RBOB unleaded gasoline traded 1.8 cents higher at $1.9424 a gallon.
Colder weather was expected to have increased demand for heating oil and distillate stocks were seen down 600,000 barrels.
Nymex January heating oil added just over 1 cent at $2.0013 a gallon.
More than one-fifth of US refining capacity is lying idle due to poor demand and weak profit margins. US refinery utilisation was seen rising just 0.3 percentage points to 79.7 per cent.
In spite of crude oil’s recovery on Wednesday, Eugen Weinberg, commodity strategist at Commerzbank, said that the risks of a further decline were rising.
“The price rally has largely been based on the expectation that oil demand will significantly increase next year,” said Mr Weinberg.
He noted that the US government had just reduced its forecast for 2010 global oil consumption growth and was now only expecting a rise of 1.1m barrels a day, compared with a previous projection for an increase of 1.26m b/d.
Mr Weinberg said the downward revisions to the demand projections should damp bullish sentiment towards oil prices.
Gold broke a four-day losing streak and recovered to $1,141 a troy ounce after ending Tuesday’s session in New York at $1,129.65.
Hussein Allidina, commodities strategist at Morgan Stanley, said downward risks for gold were limited as both investors and central banks in emerging markets were likely to buy following any dips in bullion prices.
Mr Allidina said gold looked “especially lustrous” compared with base metals and energy commodities where fundamentals were “less impressive”.
