Oil Prices Continue Steadily Higher

Oil prices moved higher yesterday as the oil inventory data from the US showed a surprisingly bigger draw than what was expected. With the OPEC not doing much in helping to support the oil prices, it has been left to the production and inventory data to have full control over how the oil prices move and thats the reason why such data is being watched very closely. Though the OPEC countries have committed to cut the production supply for the rest of the year as per their agreement, we are seeing an increase in production of oil from non-OPEC countries like Libya and Nigeria and hence the production cut brought in by the OPEC countries have had little effect so far.

Oil Prices Likely to Stay Steady

The only thing that is holding up the oil prices for now is the crisis in the Middle East where Qatar has been isolated and the tension in that region seems to be pretty high so far. We may also have a situation where the countries in that region, the oil producing ones, might be using this tension as a tool to keep the prices high and that is why it is important to keep an eye on the tension and the developments that are going on over there. Now, there is a kind of stalemate in the region and so the inventory data is the only one that seems to be able to drive the prices for the short term. The prices are now in their highs of their monthly range and we could see some correction here.

Gold prices also continue to trade near their range highs as the traders and investors wait for additional developments to decide the next course of action. The pair has done very well to get where it is now but right now, it is in an important price region which is likely to decide its direction in the short term. We have the ECB press conference later in the day today. Under normal circumstances, this would not have affected the prices of gold by much but with the talk of tapering going on and with this likely to affect the currency value and that of the yields and bonds as well, the gold prices are likely to be affected by the ECB talk as well.

Silver prices have also been going around their highs of their range over the past 24 hours and they are likely to follow the gold prices in the short term.