Oil retreated in energy commodities, falling below $39 a barrel. An industry report denoted a bigger-than-expected increase in U.S. crude stockpiles. Supply disruptions were offset from Tropical Storm Zeta.
In commodity news last week, the American Petroleum Institute reported crude inventories expanded by 4.58 million barrels. Gasoline stockpiles rose for a second straight week. Moreover, government figures are due on Wednesday.
Oil rallied on Tuesday after nearly half of the U.S. Gulf output was closed ahead of the storm. Zeta is expected to make landfall in Louisiana late Wednesday.
Oil is testing the lower end of its recent trading range as the dollar strengthens. Additionally, as COVID-19 cases surge across Europe and the U.S., raising worries the fragile demand recovery may be derailed.
The market is also facing a rise of supply from Libya. This presents OPEC+ with some tough decisions on the future of its output cuts. That will be when the producer group meets at the end of next month.
According to the API, last week, U.S. gasoline inventories expanded by 2.25 million barrels. Crude supplies at the key storage hub of Cushing increased by 136,000 barrels.
Precious Metals: Gold up 3rd Day in Row
Gold remained in the green lane for a third straight day on Tuesday. It was above the key $1,900 level as Covid-19 caseloads continued to dominate headlines. This is keeping risk appetite on a tight leash.
The yellow metal also gained ground against the greenback. By 2:00 PM ET (18:00 GMT), the Dollar Index, was down 0.2% at 92.84.
The currency has been the alternative haven to the precious metal on various long stretches over the past two months. This is due to its standing as a reserve currency. This has forced gold off record highs above $2,000 an ounce.
Spot gold rose by $6.58, or 0.4%, to $1,908.71 as the dollar fell.
Moreover, U.S. gold for December delivery settled at $1,911.90, up $6.20, or 0.3%.
Edward Moya, senior market analyst at OANDA, said, gold’s outlook will remain bullish if Election Day delivers a ‘blue wave’. It is what signals massive stimulus on coronavirus relief and infrastructure spending, he said. Moya was referring to President Donald Trump’s challenger Joe Biden’s blue, or Democratic party.