Crude Oil Prices Decline on Increasing U.S. Supplies

The oil prices fell on Wednesday, from 2014 highs reached the last session as mounting Middle East tensions were offset by growing inventories and production in the U.S.

Brent crude futures tumbled $70.80 per barrel, it went down 23 cents, or 0.3 percent, from their previous close. Brent, however, increased more than 3 percent on Tuesday hitting its highest levels since 2014, at $71.34 a barrel.

U.S. WTI crude futures were at $65.40 a barrel, it fell 11 cents or 0.2 percent from their previous settlement.

Meanwhile, following the suspected poison gas attack last weekend, the U.S. and its associates are considering air strikes against the forces of Syrian President Bashar al-Assad.

According to Eurocontrol, a Pan-European air traffic control agency, that an air-to-ground or cruise missiles could be used within the next 72 hours, warning of intermittent disruption of radio navigation equipment.

Although Syria is not an oil producer, the wider of Middle East is the most important crude exporter in the world and the tension in the state tends to put oil markets on edge.

There are also fears that the U.S. could renew sanctions against Iran, which is a major Middle East oil producer.

“Oil prices are towering on the heightened tension in the Middle East,” stated Stephen Innes, the head of trading for Asia/Pacific at a futures brokerage.

According to the report of American Petroleum Institute (API), the U.S. crude inventories increased by 1.8 million barrels last week to 429.1 million, compared to the expectations of analysts for a decrease of 189,000 barrels.

Meanwhile, Innes said that the report of API had “temporarily taken a bit of wind out of the market.”

In addition to the increasing storage levels, the U.S. Energy Information Administration (EIA) also said on Tuesday that it expects domestic crude oil production to increase more than the last expected by 2019.

The agency forecast in its monthly short-term energy outlook that the U.S. crude oil output will increase by 750,000 barrels per day to 11.44 million barrels per day next year.

 

Gold Prices Increase

On Wednesday, the gold prices increased as a combination of fears over the ongoing trading tensions between China and the U.S. and the prospect of a U.S. military strike in Syria boosted safe haven demand for the precious metal.

The June delivery for gold futures on the Comex division of the New York Mercantile Exchange was up $1.7 or 0.13 percent to $1,347.60 a troy ounce.

Meanwhile, the U.S. dollar index, which measures the strength of greenback against a trade-weighted basket of six major currencies, fell 0.09 percent to 89.24.

In other precious metal trade, silver futures fell 0.19 percent to $16.565 a troy ounce, while platinum futures increased 0.16 percent at $934.60.

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