Commodity Index: Oil Drops at the Start of 2019
COMMODITY INDEX – On Wednesday, oil markets slumped around 1% on its first trading for 2019. The escalating US supply and economic slowdown worries for the year dragged down the oil markets. Further, the concerns of an economic slowdown this year are escalating as the factory activity in China, the world’s biggest importer, dropped.
The March delivery of International Brent crude futures hit $53.27 per barrel, lower 53 cents or 1%. This came from their final close of 2018. Meanwhile, the West Texas Intermediate (WTI) recorded $45.01 per barrel, down 40 cents, or 0.9 percent.
Dubai crude, as one of the physical oil markets, made an average of $57.318 a barrel for December. Consequently, this was its lowest record since October 2017. Meanwhile, the data was according to the two traders who participate in the market.
On Wednesday, Malaysia’s Petronas placed the official selling price of a basket of December-loading Malaysia crude grades at $62.79 a barrel. This was according to the Wednesday statement of the state oil firm.
As per traders, the decline in oil prices was due to the expected oversupply. Further, this was amid the rising US production and deepening global economic slowdown concerns.
“We are most likely past the peak of this long economic uptrend,” said consultancy JBC Energy for 2018 analysis.
In December, the factory activity of China declined amid the US-China trade war and slowdown in Chinese demand that affected the production in most economies. This status is directing towards a bumpy start for China in 2019.
For the first time in three years, oil prices ended the year lower. This followed after a desultory fourth quarter that showed the shifting of buyers in the market.
Commodity Index: Gold hits $1,280 on 2018 final session
For 2018, Gold failed to reach $1,300 an ounce. Moreover, it dropped less than $20 short of the target. However, the precious metal has a massive potential to hit the target in the new year.
COMEX gold futures recorded a six-month high of $1,286.45 per ounce. This was ahead gold’s close of the final session of 2018 at $1,281.30. Further, this was lower $1.70 on the day. The precious metal ended the year with 2% loss.
The retreat of gold at the highs followed after the US stocks trimmed a few of its losses, making their worst year since the financial crisis.
The gold will likely benefit from geopolitical risks and a weakening dollar. This was according to Dillon Gage Metals Executive Vice-President Walter Pehowich in his 2019 outlook.