Oil’s seemingly inexorable march to $100 a barrel stumbled Wednesday with the release of the latest US weekly inventories data.
A further sharp fall of 1.7m barrels for crude stocks at Cushing, Oklahoma – the delivery point for West Texas Intermediate – to a three-year low bolstered sentiment.
But there was further evidence that record oil prices were having an impact on US consumption. Total US product demand fell by 0.4 per cent compared to the same period last year to an average 20.69m barrels a day over the past four weeks.
Prices rallied shortly after the inventories data were released but profit-taking set in later in another highly volatile session.
Nymex December West Texas Intermediate fell 90 cents to $95.80 a barrel while ICE December Brent lost 56 cents to $92.70 a barrel.
The Energy Information Administration said total US crude stocks fell by 0.8m barrels last week, in line with the consensus market forecast for a 0.9m barrel decline.
Earlier in the session, WTI struck a record high of $98.62 as news of the closure of several North Sea production platforms due to bad weather prompted concerns about supply interruptions. ConocoPhillips and BP were expected to reduce North Sea production ahead of a powerful storm.
US retail heating oil prices have reached record levels amid concerns about supplies ahead of winter. The EIA reported a 0.1m barrel increase in distillate stocks (including heating oil), compared with a consensus market forecast for a fall of 0.4m barrels.
Nymex December heating oil dipped just over 1 cent to $2.5971 a gallon.
Nymex December RBOB unleaded gasoline slipped 1.4 cents to $2.4211 a gallon after gasoline stocks fell by 0.8m barrels, compared with the consensus market forecast for a modest increase of 0.1m barrels.
Oil’s strength and further weakness in the dollar sent gold to within $5 of its record high of $850 a troy ounce Wednesday. Gold rose 2 per cent to $837.45 a troy ounce, after hitting a high of $845.40.
Silver rose 1.2 per cent to $15.56 a troy ounce after hitting a 27-year high at $16.19 on Wednesday but profit-taking pulled platinum down 1.2 per cent to $1,456 after reaching a record $1,482 earlier in the session.
Uranium prices jumped by 6 per cent to $90 a pound for the week ending November 5 following news of two major production delays.
Cameco’s Cigar Lake operations will be further delayed by a year while Uranium One said 2008 production would be 38 per cent lower due to a shortage of sulphuric acid in Kazakhstan. Deutsche Bank said these delays suggested the market would remain tight.
Coffee prices remain in focus amid concern about a supply squeeze.
Liffe November robusta futures dipped $10 to $2,425 a tonne, while the December contract slipped $20 to $1,950 a tonne.
With dollar weakness providing support as oil and gold prices continue their reconnaissance mission into uncharted territory, investors are asking if the bull market will continue.
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