Commodities: Oil prices fall following US supply surge while ECB boosts gold
Oil prices declined on Thursday as US stockpiles ran up, while gold futures were positive following the European Central Bank’s (ECB) confirmation of quantitative easing.
Crude prices dropped after a government report indicated US supplies has surged the most in nearly 14 years. With inventories up to 10.1m barrels in the week ending 16 January, the Energy Information Administration claimed it has experienced the biggest increase since March 2001.
At the end of Thursday’s session, WTI futures for March delivery on NYMEX fell 3.1%. Brent futures for March dropped 1% to $48.52 on the ICE Futures Europe exchange.
CMC Markets analyst Jasper Lawler said: “Oil prices did a big U-turn on Thursday, initially up 3% but ran into a wall of sellers beneath $50 per barrel as US stockpiles ran up for a second week.”
The death of Saudi Arabia's King Abdullah bin Abdulaziz Al Saud also caused an immediate jump in crude prices.
Over on COMEX, gold futures were advancing 0.20% to $1,291.10, rallying at a near five-month high.
IG analyst Chris Beauchamp said: “Gold and silver at least were appropriately enthused by the ECB news, recovering their morning losses and moving back to the highs seen yesterday.
“Talk of QE-revived buying in these metals and the apparent delivery of the goods by Mr Draghi have given renewed impetus to the upward move. ”
Meanwhile, copper fell slightly as Chinese data weakened. On LME, three-month copper futures came in low, dropping 1% to $5,665.50.