Crude oil dipped 4.2% -level Lowest in 5 Years, Gold Recovers Post NFP

Crude oil prices fell back to five-year lows on Monday, pressured by expectations that the global oversupply of crude oil will last in the first half of next year.

On the New York Mercantile Exchange (NYMEX) crude oil futures for January delivery fell $ 2.79, or 4.2%, to close at $ 63.05 per barrel. Benchmark US crude reached its lowest close for front-month contract since July 16, 2009. Meanwhile, Brent crude for January delivery on London’s ICE Futures exchange fell $ 2.88, or 4.2%, to close at $ 66.19 per barrel. Europe’s benchmark crude oil prices experienced its lowest close for front-month contract since September 29, 2009.

Most analysts of financial institutions and world-class investment still holds bearish on oil prices. The latest report of the US and Japanese economic drilling into bat market sentiment on Monday.

Extend global oil market price trends decreases with increasing apparent indication that the price in the physical market will soon reach a point of balance quickly after Baker Hughes report on Friday showed the increase in the number of US drilling rigs, although prices are falling. Downward revision of Japan’s GDP and concerns over slowing growth in China and the euro zone also weighed on market sentiment.

Chinese trade data turned out to be under-estimated the market on Monday, with export growth fell to 4.7% in November, from 11.6% rise in October, despite China’s oil imports in November rose 7.9% from a year earlier to 25.41 million tons.
Morgan Stanley, in a note dated December 5, cut its forecast for the average price of Brent oil in 2015, with predictions prices will fall to $ 43 per barrel in the second quarter of next year. Without intervention by the Organization of Petroleum Exporting Countries (OPEC), the market risk of becoming unbalanced, with the peak of the possibility of oversupply in K2-15 (second quarter 2015). Prices are set to fall S1-15 (first half 2015).

Different scenarios may occur with tight oil supply and high demand potential in the first half of 2015 with a higher world oil stocks of 1.5 million to 2 million barrels per day. With this scenario the possibility of balance in world oil prices may rise in the second half of next year, with this record is the best scenario expectations.

Oil prices slumped again last week after Saudi Arabia cut the price to the buyer Asia and the US, and then a good US jobs data strengthen the greenback to push oil prices further. A stronger dollar will make the price of the commodity being traded in the currency becomes higher for many countries.
This weekend, the US Energy Information Administration, the OPEC countries and the International Energy Agency will publish a monthly report them. This report will provide a deeper insight regarding pasokandan global oil demand.

Meanwhile gold prices rebounded on Monday session as weak global economic data rekindled safe-haven demand for the precious metal. Gold for February delivery rose $ 4.50 to settle at $ 1,194.90 an ounce. Silver for March delivery rose 2 cents to $ 16.27 per ounce.

China, which relies on exports to fuel economic growth, reported exports rose more slowly while the Japanese economy shrank for the second consecutive quarter. In Europe, German industrial production grows thin.

Earlier on Friday, gold prices slumped in reaction to the US jobs report was better than expected. However, the precious metal is successfully recorded an increase of 1.3% (weekly close) for the last week.

Today the focus of the market will highlight the ECOFIN (The Economic and Financial Affairs Council). This Council is the decision making body of the largest in the European Zone which will coordinate the economic policies of the 28 member countries. The results of this council meeting will be a major influence on the economic health of the region and of course could impact on commodity prices. Meetings are usually held in Brussels, Belgium.