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Commodities: Glut in supplies weighs on crude, gold shines

Date: Thursday 02 Feb 2012

Commodities: Glut in supplies weighs on crude, gold shines

Crude oil settled lower on Wednesday after weekly supply data revealed a bigger than expected build in supplies.

Fresh data from the Energy Information Administration showed inventories rose by 4.2m barrels in the week ended 27 January, confounding expectations of a 3m barrel increase. Dwindling demand and rising imports were behind the glut in supplies, analysts said, and pressured crude oil prices for the day.

Crude for March delivery settled 87 cents lower at $97.61 a barrel on the New York Mercantile Exchange, the lowest settlement since mid December.

On the ICE futures exchange Brent crude settled 58 cents higher at $111.56 a barrel.

The EIA said gasoline inventories rose by 3m barrels while supplies of distillates, used in heating oil, declined by 100,000 barrels. Analysts had forecast gasoline supplies to rise by 1m barrels and distillates to fall by 1.2m barrels.

There was also an excess of supplies of crude at the key oil hub of Cushing, Okla., up by 1.5m barrels. Analysts said surplus supplies at the delivery point for the Nymex contract widened the price gap between Nymex and Brent contracts. Concern about supply disruptions in Europe has also been in a factor in growing price gap.

Among precious metals bullion made headway, helped by the weaker dollar and gains among US equities.

Gold for April delivery advanced $9.10 to settle at $1,749.50 an ounce on the Comex division of the New York Mercantile Exchange.

Platinum for April was a notable riser, up $35.10 to $1,623.20 an ounce while silver for March rose 55 cents to $33.81 an ounce.

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