Oil and gold prices
Oil prices decreased on Wednesday. The price of Brent crude futures reduced by 11 cents or 2% to less than 60$ a barrel. It means that Brent crude futures price fell to the lowest level in seven months. In comparison with the best result of 2019 Brent futures reduced by more than 20%.
At the same time, the price of West Texas Intermediate (WTI) crude futures did not change and is $53.63 a barrel. Brent crude futures decreased by more than 9% during the last week. New tariffs imposed on Chinese goods severely affected the oil industry.
According to ING analysts, due to the problems of the trade war between the U.S. and China oil industry is in a tough position. ING Bank decided to lower the oil price outlook for 2019. The reason is the abundant oil supplies which most likely will be higher than consumption during the first half of 2020.
Another problem is that regional tensions in the Middle East are far from being over. Iran continues to seize oil tankers in the Strait of Hormuz.
Yesterday on August 6, the U.S. Energy Information Administration (EIA) made the decision to lower the domestic oil growth forecast. Disruption in the Gulf of Mexico caused by Hurricane Barry was the primary factor.
Gold prices on Wednesday
Another essential commodity which is gold benefited from the global economic problems. Price of spot gold increased by 0.2% to $1,476. It is worth reminding that on Monday gold prices reached the highest point in more than six years.
U.S. gold futures also rose on Wednesday by 0.2% to $1,487 an ounce.
The price of gold continues to increase thanks to favorable conditions. Goldman Sachs announced that the chance to end the trade war before the next U.S. presidential election is very low. Another American Bank Morgan Stanley warned that the possibility of the global economic crisis continues to rise due to the trade war.
In this situation, gold is becoming a more lucrative source of income. Gold prices are on the rise whereas Brent crude futures fell to the lowest level in seven months.