On Tuesday, crude oil prices settled higher as sentiment on riskier assets improved. However, gains were cut as investors braced for data expected to show U.S. crude supplies increased for the second-straight week.
The May delivery on the New York Mercantile Exchange crude futures increased 50 cents to settle at $63.51 a barrel. Meanwhile, on London’s Intercontinental Exchange, Brent added 0.58 percent to trade at $68.03 a barrel.
Crude prices yielded some of their gains heading into settlement as the focus of investors shifted the upcoming reports from the American Petroleum Institute (API), which is due on Tuesday, and the Energy Information Administration (EIA), which is due on Wednesday. The reports are expected to show crude supplies added to gains last week.
Meanwhile, the crude prices hit a session high of $63.76 a barrel as the return of risk-on sentiment boosted demand for risk assets such as oil following a more than 2 percent slump on Monday.
The EIA is expected to report that U.S. crude supplies increased by almost 246,000 barrels the previous week. U.S. output, however, is expected to continue its expansion despite falling in the number of oil rigs seen last week.
On the other hand, investors are concerns over the rising Saudi Arabia – Iran tensions as others warned that a U.S. – China trade war could lessen oil demand from emerging markets and weigh on crude prices.
“The retaliation from China is concerning for energy markets,” stated Michael Loewen, a commodities strategist.
“If a trade war occurs between these countries and it affects demand growth from emerging markets, that could be a big problem,” he added.
Gold Prices Increase
Gold prices on Wednesday gained as dollar weakened after the U.S. slapped tariffs on $50 billion worth imports from China.
The June delivery of gold futures on the Comex division of New York Mercantile Exchange gained $1.70, or 0.13 percent, to $1,339.0 a troy ounce.
The trading tensions were mentioned as a catalyst for the buying as investors stayed away from risk assets. On Tuesday, the Trump administration proposed to impose 25 percent tariffs on nearly $50 billion worth of made-in China products.
Meanwhile, U.S. dollar index, which tracks the greenback against a basket of six major currencies last stood at 89.76, went down 0.10 percent. It fell from an overnight high at 89.92 to under the level of 89.80.
In other metal trade, silver futures added 0.20 percent to $16.425 a troy ounce. Platinum futures, however, fell 0.20 percent to $927.50 an ounce.
HQBroker is here to give you a daily news roundup about the forex, commodities, technologies, automobiles, and economies. You can open an account now and make yourself updated with essential news in the market. Share your thoughts and experiences with us by commenting your HQBroker reviews.