Gold Futures Shine, but EIA Reports Fail to Help Crude Oil, Natural Gas

End-of-the-year profit-taking and position-squaring helped U.S. West Texas Intermediate and international-benchmark crude oil finish higher on Friday although the move was not enough to prevent a third straight week of losses. Natural gas futures fell on Friday after a report from the EIA showed that domestic supplies of natural gas fell by 48 billion cubic feet for the week-ended December 21. Gold futures reached their highest level since June 26 on Friday, underpinned by a weaker U.S. Dollar, concerns over a possible recession and heightened volatility in the U.S. equity markets.
James Hyerczyk
EIA Oil Report
EIA Oil Report

It was government report day in the commodity markets with the Christmas holiday pushing the U.S. Energy Information Administration’s weekly reports on crude oil and natural gas to Friday. Meanwhile, bullish gold traders continued to take advantage of the weaker U.S. Dollar and the turmoil in the U.S. equity markets.

Crude Oil

End-of-the-year profit-taking and position-squaring helped U.S. West Texas Intermediate and international-benchmark crude oil finish higher on Friday although the move was not enough to prevent a third straight week of losses. The markets also remain slightly above their lowest levels in more than a year.

On Friday, February WTI crude oil futures settled at $45.33, up $0.72 or +1.59%. March Brent crude oil finished the session at $53.21, up $0.48 or +0.90%.

According to the U.S. Energy Information Administration (EIA), U.S. crude oil inventories declined by 46,000 barrels in the week to December 21, compared with analysts’ expectations for a drop of 2.9 million barrels. Gasoline stocks rose by 3 million barrels. Traders were looking for a build of 28,000 barrels.

Although the report was deemed bearish, prices rose as investors responded to firmer equity markets and trader book squaring ahead of expected light volumes on Monday and a market closure on Tuesday for the New Year’s Day holiday.

Natural Gas

Natural gas futures fell on Friday after a report from the EIA showed that domestic supplies of natural gas fell by 48 billion cubic feet for the week-ended December 21. The number was just under the consensus of 50, but pretty close to the average of the range of guesses from several analysts.

March natural gas settled at $3.148, down $0.205 or -6.51%.

Total stocks now stand at 2.725 trillion cubic feet, down 623 billion cubic feet from a year ago, and 647 billion below the five-year average, the government said.

Gold

Gold futures reached their highest level since June 26 on Friday, underpinned by a weaker U.S. Dollar, concerns over a possible recession and heightened volatility in the U.S. equity markets. With today’s strong finish, the market closed higher for a second straight week.

February Comex Gold settled at $1283.00, up $1.90 or +0.15%.

Another drop in U.S. Treasury yields helped make the U.S. Dollar a less-desirable investment. The greenback was further pressured by a surge in demand for the safe-haven Japanese Yen and Swiss Franc.

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