FXEmpire Crude Oil Defies Common Sense While Natural Gas Climbs On Lower Inventory

Crude oil gave back some of yesterday’s gains in this morning’s Asian session to trade at 102.80 down by 21 cents, while Brent oil gave up 33 cents to trade at 111.57. The spread moved well beyond the $6 average reaching close to $9 this morning. Crude oil prices moved higher on Thursday as signs of escalating violence in the Middle East were jolted on Thursday by a Twitter posting from the Israeli military that, at first glance, suggested they had just bombed Syrian airports. Crude also got some support after Republicans offered a new plan to postpone the default. Traders should Crude oil prices to remain in a range today as uncertainty regarding US debt ceiling issue and oversupplied market can keep crude oil in a range. Asian markets are trading higher today as a result of US lawmakers moving closer towards solving its debt ceiling issue coupled with unfavorable US jobless claims data leading to expectations of ease in QE tapering concerns from the Federal Reserve. US Unemployment Claims gained by 66,000 to 374,000 for the week ending on 4th October 2013 as against a rise of 308,000 in prior week. The US Dollar Index (DX) gained by 0.1 percent yesterday on the back of US lawmakers moving closer towards solving its debt ceiling issue.
However, sharp upside in the currency was restricted as a result of rise in risk appetite in the market sentiments in later part of the trade which led to fall in demand for the low yielding currency. Additionally, unfavorable jobless claims data from the country eased concerns of QE tapering from the Federal Reserve.

Nymex crude oil prices gained by 1.4 percent yesterday taking cues from US lawmakers moving closer towards solving its debt ceiling issue. Additionally, release of Libya’s Prime Minister Ali Zaidan who was kidnapped from Tripoli hotel capped sharp gains in prices. Crude oil prices touched an intra-day high of $103.57 and closed at $103.00 in yesterday’s trading session.

Natural gas prices increased by 0.8 percent yesterday on the back of less than expected rise in the US natural gas inventories. Further, upbeat global market sentiments after US lawmakers moving closer towards solving its debt ceiling issue supported an upside in the prices. However, sharp upside in prices was restricted as a result of strength in the DX. Natural gas prices touched an intra-day high of $3.795 and closed at $3.732 in yesterday’s trading session. The US Energy Information Administration (EIA) released its weekly inventories yesterday and US natural gas inventory increased less than expectations by 90 billion cubic feet (bcf) which stood at 3.577 trillion cubic feet for the week ending on 4th October 2013. Natural gas continued to gain this morning as traders were surprised by the shift in inventory.

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